There are marriages. Children are born and adopted. Loved ones and friends pass away. Because of these changes, taking the time to update previously drafted documents is critical. Everyone needs basic estate planning documents in place. For those with assets to distribute at least a will should be created, however, everyone, 18 years and older needs a power of attorney, a medical power of attorney and an advanced healthcare directive (often called a living will). For anyone with a blended family, in a second marriage disharmony within the family, and specific dispositive requirements may want to examine the wisdom of establishing a trusts as the means of providing solutions to a growing litany of financial, and emotional issues. Certainly, prepare these documents can help avoid in-fighting and the stress for loved ones left behind; it’s well worth the time it will take to get it right.
When we create your estate planning documents, we provide you with the means to gather these and the associated documentation together in one place. That means that when the time comes for your fiduciary to take responsibility for the decisions that must be made, your efforts will have provided them with the only source they will to consult to find the answers they will need to act. Of course, that means if this source is stored in a home safe, a bank deposit box or is on file with your attorney (least desirable, btw) you‘ll need to provide that decision maker with a way to get to the documents.
Knowing that these documents need to be periodically review is not enough; you need to act on this information. That’s why we call our clients every three years to schedule their complimentary review. In addition to reviewing your documents we that your trust funding is current and ensure that your own circumstances have not changed your planning objectives.
Trusts and wills do not control how all of your assets are inherited at your death. Some assets, like a 401(K) or IRAs, are passed to the beneficiary of the account regardless of what your estate plan may dictate. This is also true of life insurance, pensions, transfer on death accounts and accounts held as joint tenants with right of survivorship.
The federal estate tax exemption for 2016 is $5.45 million per person and $10.9 million per couple. To see if tax liability might be an issue, the estimated fair market value of assets needs to be calculated. Talk to an estate planning attorney if your estate may be close to the exemption limit. An experienced attorney will be able to discuss options to avoid the federal estate tax—a whopping 40% on any amount over the $5.45 million exemption.
An up-to-date and comprehensive estate plan will help ensure that your intentions are carried out and will help to avoid headaches among survivors. Once the planning is done, however, don't forget to conduct a periodic review.
Reference: Dairy Herd (February 9, 2016) "Legal: Review and update your estate plan now"
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