An
amazing
number
of
Americans
do
not
have
wills,
and
many
who
have
a
Will
have
not
updated
them
to
reflect
changes
in
laws
or
lifestyles.
This
could
result
in
many
unintended
consequences
for
your
heirs
and
loved
ones.
A successful estate plan takes more than good intentions. It is most successful when coordinated between generations where one generation makes a clear and sensible plan and successive generations understand that plan and are involved in the process. Without proper planning, the fruits of a lifetime of hard work may be at risk. With the help of the proper professionals, you should be able to side step many problems that could arise. The potential pitfalls range from the simple to the complex. Here are a few to be aware of as you consider your current estate situation:
Failure to have a Will
It is estimated that between 60% to 70% of Americans have no will. This number does not include those wills that are out-of-date or improperly prepared. For parents, a Will is the single most important thing you can do to make sure your child is cared for by people you want if anything should happen to you. For everyone else, understand that a nameless, faceless court will decide how your assets will be distributed if a will is not in place.
No planning for incapacity
An
aging
parent
slowly
slips
into
dementia.
A
40-year-old
father
of
three
has
an
accident
and
is
left
in
a
coma.
Everyone
is
vulnerable
and
could
fall
into
an
incapacitated
state
at
any
time.
If
there
is
no
clear
plan
for
spouses
and
heirs,
a
great
deal
of
needless
emotional
upheaval
can
occur
during
an
already
devastating
situation
—
not
to
mention
the
amount
of
time
and
money
that
could
be
wasted.
Advanced
health
care
directives
and
Powers
of
Attorney
need
to
be
in
place
before
the
unforeseen
occurs.
Failure to update beneficiaries
Make an inventory of retirement accounts, investments, trusts, insurance policies and savings accounts. Review these accounts for the beneficiary designation, and how these beneficiaries are coordinated with one another. Many people think if a will is in place that beneficiary designations on accounts become irrelevant. This is not true.
Failure to update
Anytime there is a change to permanent residence, a birth, a death, a divorce, or other major life transition, it is time to review your estate plan. Seek advice from both your legal adviser as well as your financial adviser.
Tax considerations
The tax environment is constantly changing not only on a federal level, but on the state level as well. These changes can be permanent or temporary. So the heirs or charities of your choice remain the chief beneficiaries of your lifetime's work, be sure to discuss all possibilities of proper tax planning with your tax consultant. There is no need to pay more to Uncle Sam than is required.
In addition to the above mentioned items there are many other considerations to keep in mind when thinking of your unique planning situation. For more information on wills, estate planning, and how it affects you, please contact The Henssler Financial Group at 770-429-9166, or comments@henssler.com
