Benefits of Estate Planning
The sun is out, the birds are chirping, and you are feeling jubilant. You have just left an experienced Trusts and Estates attorney’s office, and your robust estate plan is assembled exactly to your specifications. You have created a will, designated your medical and financial powers of attorney, and executed a living trust for your young children that includes your current assets. You feel prepared and in control of your life, and ready to reap the benefits of estate planning.
Let us fast forward a few years: your children have graduated, married, and now have children of their own. You have moved your residence to a new state, and you have invested some of your retirement money in a commercial building nearby. You have also divorced and remarried.
With all the life changes you have experienced in the last few years; your estate plan could benefit from some tweaking. You may wish to include additional beneficiaries, select new medical and financial powers of attorney, and amend the assets included in your trust. Major life changes, such as new family members and changes in residences, are critical reasons to review your estate plan.
Since your children have grown into independent adults, and may now have children of their own, you no longer need a designated guardian. Guardians of the person provide food, clothing, shelter, and financial management for a minor child. They ensure the child receives an education and medical and dental care. You may now want to remove guardian provisions and perhaps add your grandchildren as additional beneficiaries of your trust.
For those assets with beneficiary designations such as certain bank accounts, Individual Retirement Accounts (IRAs), and 401(k) plans, you should review them from time to time to ensure the correct beneficiaries are listed. In community property states such as California, some of these accounts require your spouse to consent to any changes made with respect to the beneficiary designations.
In terms of your accounts, it is always wise to review your choices for powers of attorney. In general, the attorney-in-fact, or agent, in a power of attorney manages your (the principal) medical and financial affairs in the event you become incapacitated. The governing purpose of an agent’s role is to fulfill the interests you, as the principal, set forth, and not their own.
More specifically, there can be both medical and financial powers of attorney. Medical powers of attorney make healthcare decisions on behalf of the principal. This is known as a “durable” power of attorney, and it is part of an advance health care directive. An advance health care directive empowers the agent to make decisions about medical treatment, health care, and end-of-life decisions. Financial powers of attorney are used for managing the principal’s accounts and paying their bills, their taxes, as well as buying and selling investments on behalf of the principal.
To fully reap the benefits of estate planning, you may want to reassess both the agent who controls your financial accounts for you and the executor of your will. An executor is nominated by a testator, otherwise known as a person who has created a will, and the executor is responsible for carrying out the terms of the testator’s will. Upon the passing of the testator, an executor will ensure the testator’s debts and taxes are paid and that their assets are maintained. They may liquidate accounts, sell property as necessary, and ensure that specified assets are distributed to the proper beneficiaries of a will, actions which may be subject to the jurisdiction of the probate court.
Finally, you may also re-evaluate the successor trustees you appointed to oversee your trust in the event of your incapacity and/or death. A trustee acts as a custodian for the assets held within a trust. It may be wise to update the assets listed in the trust if you have invested in or purchased new property since creating the trust, and to revise the instructions regarding how the assets should be distributed.
Whether you need to update your estate plan, or simply create one, the experienced Trusts and Estates attorneys here at RJS LAW are well-equipped to assist you. We understand the benefits of estate planning and the value in protecting yourself and your assets and leaving a legacy for your family. Contact us at (619) 595-1655 or via the web at https://irssolution.com/. Let us help you achieve peace of mind and protection so you can keep up with life’s contingencies.
Published by Remy Hogan