Valentine’s Day is approaching when many people express how much their loved ones mean to them by giving gifts and cards. This year, try something different to show your love: think about your estate plan and how you can protect and provide for your loved ones, love will be your legacy.
The beginning of a new year is an opportune time to focus on family. A comprehensive estate plan can act as a roadmap, shielding your loved ones from uncertainties and providing peace of mind for both you and your family.
Today, it is common for adults to be in long-term committed relationships but be unmarried. If you have a life partner and are unmarried, you should have an estate plan if you want your partner to receive your money or property at your death or if you want them to make financial or medical decisions on your behalf if you are alive but unable to make your own decisions. See previous blog on domestic partnerships.
Under most states’ laws, if a person does not have an estate plan, a judge usually chooses the spouse to decide for them to formalize their affairs when they pass away. The spouse is also typically given a large part of the person’s money and property if they die without an estate plan. However, a proactive estate plan can help alleviate complications and misunderstandings among other family members. This is especially important in a blended family, where you may want your surviving spouse and children from a different relationship to receive your money and property at your death or you want an adult child to make medical decisions for you instead of your spouse.
Welcoming a new family member is a joyous occasion, but it also comes with added responsibilities. Providing for a child or grandchild at your death in an estate plan involves nominating a guardian for your minor child and creating the terms for the inheritance you would like your child or grandchild to receive. By creating or revising your estate plan after the birth of a child or grandchild, you can help ensure the well-being and financial support of the future aspirations of young family members.
In-law relations such as a son-in-law, daughter-in-law, or parent-in-law may rarely be included in an estate plan, but you may leave an in-law relation something upon your passing. You may want your in-law to receive another family member’s inheritance if they predecease you or pass away before they have received their entire inheritance. By default, most state laws will not provide for an in-law if you pass away without an estate plan, so if this is your desire, you need to proactively plan for it. Also reevaluate what you leave newly married family members in your will or trust, focusing on protecting their inheritance from their new spouse in the event of a divorce.
Life is dynamic and so are your financial circumstances. You must update accounts and beneficiary designations with each job change or significant change in income. Failing to do so may have unintended consequences on life insurance policies, retirement accounts, flexible spending, and health savings accounts, and more. Talk to your human resources benefits advisor to take an inventory of investments tied to your former employer and any new employer. Even if you have been at the same company for years, periodically check your beneficiary designations to make sure everything is up to date.
Estate planning is not a one-and-done task. As I repeatedly preach, an estate plan is a living, breathing document that should evolve with changing circumstances. Regular reviews ensure that your estate plan aligns with changes in your relationships, financial situation, and life events. An estate plan comprises documents that require accurate information to protect and provide for those you hold dear.
In February, the month of love, take the time to create or revisit your estate plan. Through thoughtful planning, you can continue to express love and care for your family, even after you are gone. The attorneys at Altman & Associates stand ready to answer your questions. Call the office at 301-468-3220 to make an appointment or visit the website at altmanassociates.net.
