Estate Planning for All Couples

Just yesterday we were shocked with the new of Angelina Jolie and Brad Pitt’s divorce. Who would have predicted that! With 6 kids and an estate worth what it is you would hope they have an estate plan and most importantly with the impending divorce have a new one done for each party! At the end of the day everyone puts off the thought of an estate plan, because death is something we dread to think or talk about. But the reality is, hard work and savings that we all create as our legacy is put at risk without an estate plan also known as a living trust. People run the risk that when they die without an estate plan their financial affairs are left in the hands of their heirs and the state. The Velasco Law Group is not only about the law, but about people’s welfare. Therefore here is a checklist for your review.

Do you have a will?

This is the most common document most people think about. Some create it on a piece of paper and hide it. If you don’t know how to write a will contact our office. However, a more robust document to avoid probate court will be an estate plan also known as a living trust. However, most people have a will to begin with. Just make sure that the will has supporting documentation, and complement the will with supporting documentation.

Complement your will with related documents. Depending on your estate planning needs, this could include some kind of trust or even multiple trusts, durable financial and medical powers of attorney, a living will, and other items. A good estate plan anticipates a wide range of potential circumstances. Does yours?

Review your beneficiary designations. Who’s the beneficiary of your IRA? How about your 401(k)? How about your annuity or life insurance policy? If your answer is along the lines of “it’s been a while,” check your documents and verify the designated beneficiaries.

It’s important to remember beneficiary designations take priority over the provisions of wills when it comes to retirement accounts, life insurance, and other non-probate assets. If, for example, you named a child now estranged from you as a beneficiary of your life insurance policy, that child remains in line to receive that death benefits when you die even if your will stipulates the money goes to someone else.

Compile asset and debt lists. Does this sound like a lot of work? It might not be. You should provide your heirs with an estate planning organizer they can reference should you pass away.

Detail your real property and personal property assets. List any real estate you own and its worth. Also list personal property items in your home, garage, backyard, warehouse, storage unit or small business that have notable monetary worth.

Another list should detail your bank and brokerage accounts, retirement accounts and any other forms of investment plus any insurance policies.

A third list should detail your credit card debts, mortgage, home equity line of credit and any outstanding consumer loans.

Consider gifting to reduce the size of your taxable estate. The lifetime individual federal gift, estate and generation-skipping tax exclusion amount is unified and set at $5.45 million for 2016. This means a married couple can transfer up to $10.9 million tax-free. In recent years, estate planning has become less about taxes and more about planning for other parts of life.

Consolidate, communicate and choose wisely.  Consolidate your “stray” IRAs and bank accounts to shorten your list, eliminate statements, reduce paperwork and cut down on administrative fees. Let your heirs know the causes and charities that mean the most to you.  Choose a reliable executor. Your executor should have copies of your will, forms of power of attorney, any kind of health care proxy or living will and any trusts you create. In fact, any of your loved ones referenced in these documents also should receive copies.

Work with professionals. Do-it-yourself estate planning is not recommended, especially if your estate is complex enough to trigger financial, legal or emotional issues among your heirs upon your passing.

As we’ve seen, money isn’t the only reason for an estate plan. You might not be a multimillionaire yet, but if you own a business, have a blended family, have children with special needs, worry about dementia or want to make things easier on your loved ones left behind, use this checklist to get started today.