Is your estate plan up to date?
Have you ever wondered if your estate plan is up to date? No? Well, you should! Keeping your estate plan up to date will make a significant difference to your loved ones after you pass, cutting out the red tape of probate and more. Here are a few simple questions to ask yourself to find out.
- Do you have a will or trust?
Without your own estate plan you are relying on the government to determine how your assets pass and to whom they pass. In addition to undesired results, this is the most costly and time consuming means of passing assets on to loved ones. A thorough estate plan protects your wishes on the division of your assets, taking the guess work (and the government) out of the equation. - Has your estate plan been reviewed in the last two years?
Even if there have been no family or financial changes since your plan was last reviewed, there have been significant tax law changes in recent years. As a result, an out-of-date estate plan may actually be worse than having no estate plan at all. - Are all of your heirs over the age of 18?
At the age of eighteen (18) children become adults and can inherit property without restriction. Proper planning is crucial to prevent a child from squandering an inheritance, or worse, from causing financial harm to themselves and their future. Read our blog post “Estate Planning Tips All Parents Should Know” for more information. - Are you certain that your assets will not be subject to probate?
Assets owned as “joint owners with rights of survivorship,” assets owned in the name of a trust, and assets that pass by beneficiary designation (such as IRAs and life insurance) will normally avoid probate. Everything else is subject to probate. The government controls probate and it can be costly. Probate is a public process that typically requires a minimum of twelve (12) months from the date of death before distribution to loved ones can be made. This is one of the main reasons why having an attorney is essential to the creation of a successful and iron-clad estate plan. - Do you have bank accounts or other assets titled jointly with someone else?
Holding assets jointly with someone other than your spouse, while common, has potentially devastating consequences. A creditor of a joint owner can take the entire asset (even your portion) to satisfy the creditor’s claim. A creditor would include a divorcing spouse, judgment creditor, or business creditor. Problems also occur if joint owners die in the wrong order. - Does your estate plan provide loved ones with protection?
The most common means of providing for loved ones is with distributions that provide asset, divorce, and lawsuit protection. Without these protections, their inheritance can become subject to their creditors or any other unfortunate circumstances in their life. - Is this your first marriage, or are you remarried?
It makes a difference! Second marriages present unique planning issues, particularly if both spouses have children from prior marriages. Proper planning is crucial to prevent undesired results, such as accidentally disinheriting your children.
If you answered “No” to the above questions, or “Yes” to #5, it may be time to sit down and update your estate plan. Call our law office at 309-699-4691 to schedule a consultation. We can assist with any changes or updates, and so you can have peace of mind.