Trust & Estates: Eight Simple Estate Planning Considerations
1. Do you know where your original Will is? Copies of Wills are usually inadequate for court purposes. Your heirs or executor should know where your Will is, or it should be in a place where it is likely to be found.
2. Are your beneficiaries up-to-date? Your assets, such as 401Ks, IRAs, retirement plans and life insurance, pass to the beneficiary designated on forms held by the custodian or life insurance company. There is no substitute for reviewing a current copy. Ask for a current copy and keep it in your records. For many people, these are major sources of wealth and it is important that they be correct.
3. Is your Plan up-to-date? Does it reflect your current family situation?
4. Are your heirs receiving their inheritance in appropriate timing and amount? Leaving "too much money too soon" to your heirs can be one of the worst things you can do. Unless your Will provides otherwise, your heirs receive their inheritance outright and without restrictions. Children are entitled to their entire inheritance when they turn 18. Scary thought?
5. Do you have a Durable Power of Attorney? Is your designated agent appropriate? A Durable Power of Attorney provides for the management of your affairs - personal, financial and health care- in the event you become unable to manage them yourself due to illness or injury. The alternative is usually a court-ordered guardianship which may be clumsy, contentious and expensive. A Durable Power of Attorney also allows you to designate who will be in charge of your affairs. Sometimes this is the most important Estate Planning document.
6. Is your "home-made Estate Plan" adequate? Anecdotally, over half of the "do-it-yourself" Wills and Powers of Attorney have significant deficiencies. They may be inadmissible in court and have unintended consequences.
7. Have you designated guardians for any minor children? Oklahoma law allows you to nominate who would be the guardians of your minor children if the parents are not available. If you do not nominate someone (in writing), state law and a court decide who will be responsible for raising your children.
8. Is everything in your Trust that needs to be in your Trust? If you have chosen a Revocable "Living" Trust as an estate planning device, it is critical that your assets be properly titled. Those things that should be in the Trust must actually be titled in the name of the Trust. If there are assets or property that are not titled in the name of the Trust, a probate (which the Trust is normally designed to avoid) may be required and may result in a distribution of the inheritance in a way contrary to your intentions. It's amazing how much time, money and effort people put into making a trust then don't carry out the plan by funding it properly initially or failing to keep it updated over the years.
Most Estate Planning lawyers are happy to spend 15-30 minutes looking at an existing Estate Plan to advise a client if it has serious deficiencies. The best Estate Planning lawyers pride themselves on delivering value to their clients. Well-executed Estate Plans can save a lot of money and can prevent many problems, regardless of wealth or family circumstances.
Harry V. Rouse