Estate plans should never be cookie-cutter. Each estate plan should be customized to your unique situation and needs to protect you, your loved ones and assets. Anytime you can learn how to ensure your plan is the best it can be, is a good thing. The following article* was published online at Kiplinger, on 1/6/25 and written by David Rodeck.
“These tips can help you avoid common trouble spots and create a more effective plan. Create a more effective estate plan and avoid common mistakes by following these seven best practices.
1. Have backups for different roles
You should name a backup for estate planning roles such as executor of your will, financial power of attorney and health care agent. That way, if one predeceases you, someone else will be able to step up. If your primary selection is about your age, name a younger loved one as a backup.
2. Communicate with your loved ones
Your loved ones should know where to find your estate planning documents. You should also discuss inheritance plans while you’re alive so people aren’t surprised. “That way, you aren’t creating turmoil after you pass. Money can destroy families,” says Bryan Bell, a certified financial planner with First Horizon Advisors in Brentwood, Tenn.
3. Check your state’s laws
Each state has its own laws for estate planning. If you move to a different state, you will likely need to update your documents to conform with that state’s laws.
4. Remember your pets
If you have pets, you could lay out in your will who will take care of them after you die and leave them money to do so. You could also set up a pet trust designed to pay out enough money each year to cover your pet’s bills.
5. Share with health care providers
Proactively give health care providers your living will and health care POA, especially before a major surgery. Most will ask for these documents as part of the admitting process.
6. Don’t forget to put assets in your trust
If you set up a trust, retitle your assets so they’re under the trust’s name and tax ID. “I see revocable trusts that don’t end up doing anything because the client never retitled the assets,” says Bell.
7. Review and update regularly
Review and update your estate planning documents every three to five years or after significant life events. Financial institutions will likely refuse a POA that’s more than three years old because of concerns that your circumstances have changed.
These days, you can create your entire estate plan online with services such as LegalZoom. Generally, however, online options are most appropriate for those in a straightforward situation, such as a single adult with no children. If your circumstances are more complex, you’ll benefit from the guidance and counseling of a lawyer, who can help you weigh your options and discuss possible issues. “If you have significant assets, or if you have children from multiple marriages, there are more estate planning landmines to watch out for,” says Bruce Tannahill, a director of estate planning for MassMutual.”
I was glad to see the author included making arrangements for your pets. So many families now consider their pets “family” so it just makes sense to ensure they are cared for if something happens to you. The other tip I appreciated was the one about moving to a different state. Your family won’t want to discover your estate plan, created in another state is legally questionable in your new state of residence. You should work with a local estate planning attorney to make sure everything will be accepted legally. Speaking of which, if you need to have your plan updated, or even created, please don’t hesitate to reach out. I’d love to help you create the plan that is exactly what you need and want. Your loved ones will appreciate it. Call me at 513-399-7526 or visit www.davidlefton.com for more information.
Source: Kiplinger, on 1/6/25 and written by David Rodeck.
*Portions of this article not included.