Most people don’t want to be remembered as the parent who didn’t plan for loved ones. That’s part of your legacy, and it can be a good memory, or a bad one, your choice!
You’ve worked your whole life, accumulating assets and building a family. Now, as wisely noted in The Northwest Herald’s recent article, “4 Ways of Leaving a Legacy” it’s time to make sure that your legacy is properly documented. This ensures that family, friends or charities that matter are taken care of.
You need to have a Will. It’s essential. Even if you have other estate planning strategies and documents, a Will lets you direct specific assets to a particular person or to make a general bequest. A Will names an executor to settle the estate, a guardian for minor children and instructions to distribute property according to your instructions.
A Trust is an option preferred by many experienced estate planning professionals. You should work with a veteran trust lawyer to create one. A Revocable Living Trust is flexible and can be changed at any time. It can protect your property, if you become incapacitated. An Irrevocable Trust can’t be modified. However, it can reduce estate taxes and offer protection from potential creditors. The key advantage of using a trust is that it avoids probate and eliminates the need for a financial guardian in the event of physical or mental incapacity.
A Beneficiary Designation is important for contractual-type property, like life insurance policies, annuities and retirement accounts. You need to make sure that you have updated primary and contingent beneficiaries. Re-evaluate your choices regularly, as circumstances change and life events occur. Beneficiaries can only be changed by signing a new beneficiary designation form. Your will or trust have no impact on them.
Joint Ownership arrangements transfer property to the co-owner, in the event of the other owner’s death. This is common with the family home and it’s appropriate for some types of property. Speak with your attorney about how to use this approach.
It may sound a little complex, especially if this is the first time you are addressing estate planning. However, with the help of an experienced estate planning attorney, you’ll find yourself relieved to have taken care of this very important task. Your loved ones will appreciate what you have done for them.
Reference: Northwest Herald (November 28, 2017) “4 Ways of Leaving a Legacy”