Articles Posted in Estate Planning

Talking to your children about your estate plan

A key part of the smooth implementation of your estate plan is having a conversation with your children where you are open and transparent about your plan. Having this conversation with them can help prevent future conflicts and can give them more confidence to know what to do when needed. Although it might be much easier said than done, avoiding these difficult conversations or keeping your estate plan a secret can have major repercussions.

Here are some important topics to cover with your children when talking about your estate plan:

Often, pet owners consider their pets to not just be their most valuable possessions but to be members of their family. Those who own pets want to do all they can to care for their animals, so it is important to consider what may happen if your pet outlives you and to have a plan in place for this possibility. Here are some options for your estate plan to make sure your pet will be well cared for in the event that you pass away:

Animals in the Eyes of Law

Animals are considered personal property – like a car, jewelry, and other material possessions – under the law. If the person who owns a pet does not have an estate plan, their pet will be distributed to their “heirs-at-law” or to the people who are their closest living relatives according to a genealogical chart. If this person does have an estate plan, their pet will still be distributed to the individual set to inherit their personal property unless there is a specific provision regarding their pet in the estate plan. In cases where beneficiaries or heirs of someone’s estate do not wish to take care of the pet, people often end up surrendering the pet to a shelter.

It is unlikely that you need to be reminded of April 15th (or the next business day if the due date falls on a weekend or holiday) being the tax filing deadline date as we are often reminded of this date every year. However, if you are the person serving as executor of your loved one’s estate, do you know the filing date of an estate tax return?

This due date varies. In general, you must file a federal estate tax return within nine months of the date of death. Filing this return in time is one of your responsibilities as executor of the estate.

If you fail to file the return on time, interest and penalties could be added on top of any federal estate tax that is due.

In the last post, I shared about specific things to keep in mind while reviewing your estate plan. Here are 10 more:

11. Charitable Contributions

If you have chosen any charitable organizations for planned donations, make sure these organizations still align with your intentions, goals, and values.

During your life:

When it comes to estate planning to prepare for what may happen while you are still alive, you’ll want to make sure you have documents in place for your spouse or other individual(s) you trust to be able to make medical and financial decisions on your behalf if you become incapacitated or otherwise unable to make these decisions. This can be the same person if you choose, or you may wish for one person to make medical decisions and for another to make financial decisions for you.

After your death:

Estate planning serves to ensure an individual’s assets are distributed as they wish after they pass away. Proper estate planning is even more vital for a single parent to ensure the wellbeing of their children as they are solely responsible for providing for and protecting their children.

One of the most vital aspects of estate planning for a single parent is to designate a guardian for their minor children. If something were to happen to the parent, this ensures that a trusted person will be appointed to raise their children. It’s important to choose a guardian who shares similar values, has a similar parenting style, understands the needs of the children, and who would be willing to take on this responsibility. A parent should have an open discussion with the potential guardian and select an alternate guardian as well.

Establishing a trust or will is foundational to estate planning and can be created to protect and manage assets to provide for their children. A trust can ensure assets are held and distributed according to a parent’s wishes after their passing. A trust that exists until one’s children reach a certain age or milestone can be set up to provide ongoing support for their needs as they grow up, including education, healthcare, and other necessities for their wellbeing. This can also provide protection against potential mismanagement of assets or irresponsible spending.

Much like the process of building a house, the steps to building an estate plan should be well-defined and carefully considered.

Here are some things to keep in mind when creating your estate plan:

· Get the right “builder.” Just like for a house, you will most likely need to hire an estate planning professional to make sure that what is built is done correctly according to your goals and the vision you have in mind. You will make your wishes known, of course, but you will rely on the builder’s expertise.