Is Your Estate Planning Up To Date?
Take this simple test to find out!
1. Have you prepared a will or a trust?
[ ]Yes [ ]No [ ]Don’t Know
Without proactive planning, you are relying on the state legislature to determine how your assets pass, to whom they pass, and when they pass. In addition to having potentially undesired results, this is perhaps the most costly and time consuming means of passing your assets to your loved ones.
2. If you have done a will or trust, has it been reviewed in the last three years?
[ ]Yes [ ]No [ ]Don’t Know
Even assuming that there have been no family or financial changes since your plan was last reviewed, there have been multiple and significant tax law changes since 2012. An out-of-date estate plan is perhaps worse than no estate plan at all. Our experience is that people view estate planning as an event rather than a process. Keeping your plan current is vital to achieving the goals you set out to accomplish.
3. Are all of your heirs over the age of 18 and financially responsible?
[ ]Yes [ ]No [ ]Don’t Know
Under state law, children inherit property no later than age 18 without restriction. Proper planning is crucial to prevent an heir from squandering his or her inheritance, or worse, from causing harm to himself or herself, or being subject to creditors.
4. Are you absolutely certain that your assets will not be subject to probate?
[ ]Yes [ ]No [ ]Don’t Know
We encourage you to make a list of each asset you own and identify how each asset is going to avoid probate. Assets owned as “joint tenants with rights of survivorship,” assets owned in the name of a trust, and assets that pass by beneficiary designation (such as IRAs, life insurance, etc.) will avoid probate. Everything else is subject to probate. Probates can be costly and can take anywhere from six (6) to eighteen (18) months from the date of death to conclude.
5. Do you have assets titled jointly with a child or children, or someone else?
[ ]Yes [ ]No [ ]Don’t Know
Holding assets jointly with someone other than a spouse is quite common, but has some potentially devastating consequences of which most people are unaware. A creditor of a joint tenant may potentially take the entire asset to satisfy the creditor’s claim. A creditor would include a divorcing spouse, judgment creditor, or business creditor. Additionally, problems can be created if joint tenants die in the wrong order.
6. Does your current plan provide your heirs with asset protection, divorce protection, and lawsuit protection?
[ ]Yes [ ]No [ ]Don’t Know
The most common means of providing for heirs is with outright distributions. By doing so, however, the inheritance becomes subject to the creditors and predators of your heirs.
7. Have you had any changes in your family?
[ ]Yes [ ]No [ ]Don’t Know
Second or subsequent marriages present unique planning issues, particularly if both spouses have children from a prior marriage. Also, adoptions, births, and deaths of children may drastically change your opinion of your plan. Proper planning is critical to prevent undesired results.
