The Law Offices of Joseph Adelizzi

Yes, You Do Need an Estate Plan and You Do Have an Estate.

An Estate Plan is more important on a dollar to dollar basis to the middle class.  What many don’t understand is that they do actually have an estate, and if all of its parts are added up, people have more assets than they think, says Federal News Network’s article “Your bigger-than-you-think estate.”

The downside is that many don’t realize that this is the case, until after a loved one dies. When that happens, as it inevitably will, it’s far better to have an Estate Plan for this eventuality than letting the courts, relatives, the IRS or the state decide what to do with what you possessed.

The trick is figuring out what you own and determining how you want it to be distributed after you die.  That is what your Estate Plan will do for you and your family.

Someone who has worked all their life, has money saved in a 401(k) or other types of retirement accounts, owns a home that they bought in the 1980s or 1990s or even more recently, usually has a bigger-than-they-think amount of assets accumulated.

So how do you begin? Start with this checklist:

Are your beneficiary designations up to date? Your beneficiary designations ALWAYS supersede your will. Some of your largest assets are not controlled by your will, but by beneficiary designations. For federal employees, this includes the Thrift Savings Plan (TSP) and Federal Employees’ Group Life Insurance (FEGLI), and any other life insurance policies. Do you want your beneficiary to be a surviving spouse? Children?  Your estate plan will address these issues.

Is your will up to date? How about any trusts? Most people have their wills done and then forget about them. That’s always a big mistake. We experience changes in life, and our wills need to reflect those changes. If the people you named as executors thirty or ten years ago have died, did you have a successor executor named? Are they still alive, or are they still the person you want to execute your will? Make sure you also consider your children and their circumstances. If you have a child with special needs in your family, or if a child of yours is going through a divorce or likely to go through a divorce in the future, an estate planning attorney will be able to help you design an estate plan for their situation.

Are your financial and medical directives in place? Making an estate plan for incapacity is as much a part of estate planning as your will. If you became ill or injured and could not make decisions for yourself, do you have the documents that will allow someone else to do so on your behalf?

An estate planning attorney can work with you on all these matters, so you can relax and enjoy your retirement. Don’t procrastinate—this task can be done before the year is out, if you start soon.

Reference: Federal News Network (October 2, 2019) “Your bigger-than-you-think estate.”