Add Estate Planning To Your List of Resolutions This Year
The New Year means tax season is beginning. Here in Dartmouth, Massachusetts, like every other part of the country, we begin collecting our tax forms and looking for all possible deductions. Estate planning goes hand-in-hand with tax season as you’ll see in a moment.
The New Year also is a time for making resolutions. I usually resolve each year to try and live a healthier lifestyle. I promise myself I’ll get around to losing that extra 10 pounds. My wife and I agree to save a little extra each week for retirement.
While many people focus on getting organized for the New Year, estate planning is an equally important personal finance goal that should make every adult’s “to-do list.”
As I’ve mentioned in past blogs, too many people are without plans to protect themselves and their family in the event of a crisis. One lawyers.com survey revealed that only 51% of adults have a basic will and other estate planning documents in place should death or incapacity occur.
I’ve said it before and I’ll say it again: contrary to popular belief, estate planning isn’t just for the rich and famous, it’s for everybody. At a bare minimum, almost every adult needs a basic will, power of attorney and health care proxy in place to avoid a legal and financial nightmare if something unexpectedly happened to them.
So what are these documents and how do they help you in a time of emergency? Let me explain just a few:
- A Will- A will is a document that specifies what should happen to your assets if you pass away. If you die without a will, then the laws of the Commonwealth will dictate who gets your property and you may not like those results.
- Trust- A trust is a legal entity that can hold title to property. With your assets securely placed in a trust, you can minimize your financial exposure to lawsuits, divorce and bankruptcy while alive. Upon death, a trust will keep your affairs private and out of the Probate Court. It also allows a great deal of control for people who do not want their inheritance going outright to their heirs if something unexpectedly happens.
- Durable Power of Attorney- A durable power of attorney gives explicit permission for someone to access your personal accounts, pay your bills and handle all other financial and legal affairs if you are incapacitated in an accident but do not die. Under the current privacy laws, even a spouse may have a hard time accessing personal information without such documentation in place.
- Health Care Proxy – This document specifies your healthcare wishes if you are incapacitated in an accident or as the result of sickness and unable to speak for yourself. Such wishes may range from whether you want certain medications administered to you (if at all) or whether to start life support in critical situations.
Accidents and serious illness happen every day without warning. That’s why it’s so important for any adult who has not tackled their estate planning to add it to their resolutions this year. It will save their family from years of headaches and thousands of dollars in unexpected costs should the unthinkable happen.
Resolving to get your legal affairs in order is one of the most important things you can do this time of year to make sure your family, your wishes and your assets are protected if something unexpectedly happens to you this year.
To make it easier for our readers to accomplish this resolution, we’ve created a Family Financial Checklist which is absolutely free. Just visit FamilyFinancialChecklist.com to download your free checklist and begin getting your estate plan done for 2017.