It’s that time of year again. Remember to pick up a turkey or a ham, decorate the house inside and out, and let’s not forget the presents — something for everybody on the ever-growing list.
Oh, and don’t forget to update your estate plan.
Surprised? Don’t be. Estate plans need to change as often as life changes. If there is a new family member at the dinner table this year or perhaps a missing member, then it’s likely time for an estate-plan update. A longer or shorter gift list this year also might signal a change is needed.
Many people have never taken the time to create an estate plan at all. The idea may sound grandiose, but anyone who has assets they’d like to eventually give to loved ones needs an estate plan.
A good start to an estate plan can be as easy as writing a will. A will establishes who you are, who will be in charge of settling your estate when you pass away and how you want the things you own distributed. A will should revoke any prior wills you have created and set guardians for your minor children.
But perhaps your assets and goals require something a bit more sophisticated. A qualified estate-planning attorney can help you write a will that can be used to shepherd assets for minor children, to minimize estate taxes and to provide for more structured distribution of assets to your beneficiaries according to your specific instructions.
Remember that wills, either simple or sophisticated, must go through a court process known as probate. Probate can be time-consuming, costly and, because it is public, provides a ready venue for anyone who wants to contest the will.
Alternately, a revocable living trust can serve as a will substitute, without the extra cost, time delays and potential legal problems of a will. A revocable living trust is a private, flexible estate-planning tool that holds and distributes your assets with little or no court intervention according to a set of terms outlined in the trust.
Everyone’s situation is different and there are many ways trusts can be structured to protect families. A revocable living trust could:
• protect a spouse from losing the assets you’ve built together in a subsequent marriage/divorce
• protect children’s inheritance from many types of creditors
• give loved ones an incentive for doing things you consider worthwhile (finishing an education, remaining gainfully employed, staying away from drugs and other self-destructive behavior)
• prevent a child from losing his/her inheritance in a divorce
Perhaps you already have created a basic estate plan but changes in your family, assets or goals now require additional planning. You also should look into a durable power of attorney, a health-care directive, a HIPAA release or one of several kinds of trusts, including a life-insurance trust, a qualified personal residence trust, a charitable remainder trust, a grantor-retained annuity trust or a gifting trust.
An estate-planning attorney can help you determine whether your estate plan still meets your needs and goals.
Barid and Smith have been practicing law in Savannah for more than 17 years and are partners in the estate planning, elder-law and special-needs planning law firm of Smith Barid, LLC.