PEACE OF MIND
1. Have you prepared a Will or a trust?
Without proactive planning, you are relying on the state legislature to determine how your assets pass, to whom they pass, and when they pass.
In addition to having potentially undesired results, dying without a Will or trust is perhaps the most costly and time-consuming means of passing your assets to your loved ones.
2. If you have done a Will or trust, has it been reviewed in the last three to five years?
Having your Will or trust reviewed periodically is always a good practice.
This is not a one and done process. It is your life, so it is ever changing, your estate plan should reflect those changes and federal and state law changes as well.
Our experience is that people view estate planning as an event rather than a process. Keeping your plan current is vital to achieving the goals you set out to accomplish.
3. Are all of your heirs over the age of 18 and financially responsible?
Under state law, children inherit property no later than age 18, without restriction. Proper planning is crucial to prevent an heir from squandering his or her inheritance — or worse, from causing harm to himself or herself.
4. Are you absolutely certain that your assets will not be subject to probate?
We encourage you to make a list of each asset you own and identify how each asset is going to avoid probate.
Assets owned as “joint tenants with rights of survivorship,” assets owned in the name of a trust, and assets that pass by beneficiary designation (such as IRAs, life insurance, etc.) will avoid probate. Everything else is subject to probate.
5. Do you have assets titled jointly with a child or children, or someone else?
Holding assets jointly with someone other than a spouse is quite common, but has some potentially devastating consequences of which most people are unaware.
A creditor of a joint tenant can take the entire asset to satisfy the creditor’s claim. A creditor would include a divorcing spouse, judgment creditor, or business creditor. Additionally, problems can be created if joint tenants die in the wrong order.
6. Does your current plan provide your heirs with asset protection, divorce protection, and lawsuit protection?
The most common means of providing for heirs is with outright distributions. By doing so, however, the inheritance becomes subject to the creditors of your heirs.
7. Is this your first marriage?
Second or subsequent marriages present unique planning issues, particularly if both spouses have children from a prior marriage. Proper planning is critical to prevent undesired results and conflicts.
8. If you are in a second marriage, are each spouses’ assets clearly separate property?
When spouses marry with children from prior marriages, it is important to designate how you want your estate to pass, to your new spouse, to your children, or some to both.
It is also important if one spouse brings their separate property home to the marriage that it is clear and distinct who should benefit from that property.
9. Are all of your children over the age of 18, if not, have you planned for their guardians?
As young couples with children, most people don’t make any plans, some make some provisions just in case, but what happens if something happens to both parents in a common accident.
Make sure it is clear who and how you want your children raised if suddenly you both are not there to raise them.
OK — How did you do? If you answered “No” to any of the above questions or “Yes” to #5, you should make an appointment to speak to an attorney about your estate plan.
Having a Will does not mean you are going to die tomorrow, it means you have prepared and helped your loved ones for when you do die to make the distribution of your estate easier and on your terms.
This article is provided by the Law Office of Lasca A. Arnold, PLLC.
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