Estate Matters: A Resolution Worth Keeping--Your Estate Plan
A Resolution Worth Keeping--Your Estate Plan
The New Year is a great time to reflect on your accomplishments and plan your future. Like thousands of Americans, one of your top New Year's resolutions may be to get your finances in order and an estate plan is essential part of a complete overall financial plan. Unfortunately, seven in ten people never make a point of creating a will or estate plan. Every adult should have a will, advance medical directives including a living will, and a durable power of attorney--if you don't--get them! The effort spent on estate planning will be worth it. And if your will and estate planning documents are out of date, consider updating them.
Aside from giving you peace of mind, a comprehensive estate plan provides those you leave behind with a clear plan and guidance as to your wishes in a number of areas.
A primary purpose of your will is to determine who will receive each asset. Absent a will, most of your belongings will likely be sold and the proceeds distributed according to the state's intestate provisions. Rather than sit back and allow this, why not determine who will be given items that will mean much more than just their auction value. And the state's asset allocation may be quite different that what you have in mind.
Failing to designate who will raise and care for your children turns this important decision over to a complete stranger--a judge--who will attempt to act in the children's best interest. After hearing testimony and considering legal priority, the judge may or may not take into account religious values and practices, current schooling, proximity to family and friends, and keeping siblings together. This may also result in a stressful and expensive legal battle by various family members. Additionally, a complete estate plan can provide for educational resources and resource management for those not able or ready to pay for college or handle a significant financial receipt.
Reduction of inheritance and/or estate taxes may be an issue for those with significant assets. Also, state inheritance taxes may be a consideration, especially if you plan on passing assets to someone who is not an immediate family member. As your estate becomes larger and more complicated, myriad other financial considerations come into play. And you may also find that the gathering and organization of legal, personal, tax and financial documents necessary for a complete estate plan not only helps with the administration of your estate, but may actually help you in the here-and-now.
As a properly crafted estate plan is custom tailored to your needs and desires, any number of additional goals may be considered. Perhaps you wish to avoid family conflict and future ill-will. Or provide adequate liquidity to pay your final expenses and taxes. Should you own a family business or farm, you may wish to protect it and pass it onto a suitable heir. You might wish to provide living expenses for your family while they wait for settlement of your estate. Regardless of your reasons and objectives, one thing is certain--now is the time to begin planning. Don't let this year's resolution end up on next year's list!
Disclaimer: This general information is neither legal opinion or advice, nor a complete estate planning discussion, and refers to Maryland law--your state's law may differ. As each situation is different, you should seek independent legal advice from an attorney for specific information.
Charles R. Stewart is an attorney in Hagerstown practicing exclusively in wills, trusts, and estate planning. Please send questions to PN@LawOfficeStewart.com or visit www.LawOfficeStewart.com.