April 1st, 2024

Estate Planning Jitters? You Asked, We Answered During This Key Month!

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Why Do I Need a Will (or any estate planning for that matter)? 

First and foremost, you want to remain in control of your final dispositive wishes. If you die without a Will, you will die “intestate.” Dying intestate can have serious and unanticipated consequences for both your estate and your loved ones. Specifically, the laws of your state of residency will dictate who controls the administration of your estate (the “Personal Representative”) and who ultimately receives your assets. Often, this invites unintended participants in the process, including potentially disfavored family members or other interested parties making suggestions to the court. The court then decides—not you—which can lead to family discord and significant cost. At minimum, planning can allow you to dictate the Who, What, Where, and When of your estate.  

What if I Have Been Named a Personal Representative?  

Think before you act and seek guidance where necessary. A Personal Representative is a fiduciary. With that can come great responsibility and liability. For example, some of the responsibilities include but are not limited to collecting the assets of the deceased, opening the estate, protecting and preserving the estate property, preparing necessary Court filings, including an inventory and accountings, addressing expenses, debts, claims (for and against) of the deceased, and eventually distributing the estate property to the appropriate beneficiaries. Beneficiaries will look to you as the fiduciary to act in the best interest of the Estate. Often, obtaining the guidance of a licensed professional will assist you in adhering to these duties and responsibilities and avoiding the pitfalls that could be present. We recommend reading our full article on this at steinsperling.com/executor.  

What Is a Power of Attorney (POA) and Why Do I Need One? 

A power of attorney (POA) is a legal document that allows someone else to act on your behalf now or after an incapacity. There are two types of POAs – Financial, sometimes called Durable Power of Attorney, and Health Care, also called Health Care Directive. These documents are critical in the absence of your individual ability to act in one of these settings. Often, if an incapacity or other issue should befall you without these documents in place, the alternative is a costly court proceeding for guardianship. This can be true for any adult, including your children, after reaching the age of majority. 

How Do Beneficiary Designations Affect My Estate Plan? 

Beneficiary designations dictate who may receive a certain asset. Therefore, in the context of an estate plan, you must ensure consistency because a valid beneficiary designation will override an alternate disposition under a Will/Trust. Failing to monitor or update such designations with changing intentions, goals, new family members, etc., could be catastrophic and sometimes can be the undoing of a complex estate plan. You need to stay on top of the designations, know what they say, coordinate them with your estate plan and keep them current. BTW: It’s smart to have both a primary and a contingent (backup) beneficiary. 

How Often Should I Review My Documents/Portfolio  

Regularly revisiting your existing estate planning documents is crucial.
Begin by asking yourself: 

  • When was the last time I read these documents? 
  • Do these documents align with my current goals? 
  • Have circumstances changed, necessitating a reassessment of asset allocations and beneficiaries? 
  • Are the individuals in charge of my affairs still appropriate given current circumstances? 
  • Have the laws changed? 

If you haven’t reviewed these documents in a few years, now is the time!  

Adam Abramowitz assists individuals and families with all aspects of estate and trust planning at Stein Sperling Bennett De Jong Driscoll PC, including the use of trusts for the next generation, charitable gift planning, special needs planning, estate and trust administration and estate and trust litigation. Contact Adam at aabramowitz@steinsperling.com.