Make a New Year’s Resolution to Create Your Estate Plan or Update Your Existing Plan
The tradition of making New Year’s resolutions goes back more than 4,000 years. Today, studies indicate that about 40% to 50% of us make promises to improve as the calendar turns over to January 1. For 2020, your resolutions should include creating your estate plan (if you don’t have one) or reviewing your existing plan (if you do have one).
Everyone should have a current estate plan. Your plan ensures fulfillment of your financial goals and wishes after your death. A complete estate plan also includes essential documents that protect you and your family during your lifetime if unexpected events occur.
Why Do You Need an Estate Plan?
Estate planning begins with an assessment of your personal, family, and financial circumstances. Then, the process turns to ascertaining your needs, wishes, and goals for yourself and your family, during your life and after your death. A complete estate plan prepared by an experienced estate planning attorney includes documents to implement all your wishes, needs, and goals. It also protects you and your family during your lifetime.
Why Do You Need to Review Your Estate Plan Regularly?
Making an estate plan is not an endeavor that you undertake only one time. After you create your estate plan, it’s essential to review it regularly with your attorney to ensure that all the provisions and documents reflect your current circumstances and goals.
Many types of changes in your life necessitate revising your estate plan. Family changes that affect an estate plan include:
- Birth or adoption of children or grandchildren
- Death of a family member
- Marriage or divorce (your own or another family member’s)
- Children, grandchildren, or other beneficiaries reach adulthood (age 18 for legal purposes)
- Disability or incapacity of a family member, including your spouse
- Change of state of residence (your own or another family member’s)
In addition, changes in your property and assets and goals — including those relating to your business interests — require making revisions to your estate plan. The changes may be positive or negative. An increase in your assets and interests affects your estate plan just as much as a decrease does.
What Happens If You Do Not Have an Estate Plan?
If you do not have an estate plan, Michigan law determines who receives your property when you die, who makes your final arrangements, and who administers your estate. A probate court judge likely will decide who cares for you and handles your finances if you become incapacitated, even temporarily. If you have minor children, a court may decide who cares for them and handles their finances if you die or become incapacitated.
If you only have a Will, you may think that you have a complete estate plan. However, a proper estate plan includes much more than just a Will. Your plan should also include other important documents, such as a Durable Power of Attorney in which you appoint a trusted person to make financial and property decisions if you become disabled and unable to make decisions. Another important document that should be included is a Patient Advocate Designation in which you appoint a trusted person to make health care and end of life care decisions should you become disabled. In addition, you and your family may benefit substantially from including a trust in your estate plan, particularly if beneficiaries are minor children or persons who have issues with managing their finances. You should discuss these documents with an experienced estate planning attorney.
In the absence of a complete estate plan, your loved ones will face difficult decisions when you die or if you become incapacitated during your life. The uncertainty about your wishes (and their own wishes) can lead to family disagreements and disputes that can tear a family apart. Moreover, court proceedings involving you and your estate may consume your assets and take considerable time to resolve.
What Is the Best Time to Create or Revise Your Estate Plan?
If you do not have an estate plan, the time to create one is now.
If you do have an estate plan, you should review it with your attorney whenever changes in your life or circumstances occur. The best approach is to meet with your lawyer at least once every few years to ensure that your plan is current.
In either case, making a New Year’s resolution for 2020 to make or review your estate plan is a good strategy to ensure that you and your family are fully protected, whatever the future holds. When you do take that step, you start the new year having the peace of mind that you have done everything necessary to safeguard your family and your estate.
Talk with an Experienced Ann Arbor Estate Planning Attorney
In my practice at Ager Law Office, I help individuals and families with all aspects of estate planning. From my Ann Arbor office, I serve clients throughout Washtenaw County. To talk with me about a new estate plan or about updating your existing plan, call (734) 649-0784, send an email to firstname.lastname@example.org, or use the online contact form.