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New Year's Resolution: Beginning Your Estate Plan


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It's a New Year, which means, New Year's Resolutions.  It's a time where people reflect on - our finances, our health, our habits, and our goals - to visualize what they would like to accomplish for the upcoming year. The top 3 new years resolutions include: losing weight/healthier eating, life/self improvements, and better financial decisions.  Even though estate planning is a part of making better financial decisions and is frequently on lists of New Year's resolutions, estate planning is not something most adults consider.  Over 55% of U.S. adults have not completed even a basic estate plan.  Why is that?  Despite the importance for everyone to have basic estate planning documents, a will, power of attorney and healthcare documents, most people assume, estate planning is only for the wealthy, but this statement does not hold true anymore.  Regardless of an individual's financial position, estate planning provides families with peace of mind that their wishes, spouse and families are protected in the event of the loss of a loved one.  How many New Year's resolutions can provide benefits to both you, your spouse and your family at the same?  Completing your estate plan does not have to be overwhelming, time consuming or expensive.

 

            For any New Year's resolution to make it past January, it needs to be more than a wish (i.e., how many wish or hope that we will get in better shape or eat healthier this year).  To make any New Year's resolution successful, you need a plan.  Even after a plan is developed, people need to take action in order to achieve their goals.  Research shows that only 8% of people actually achieve their goals that they set for themselves at the beginning of the year.  This doesn't mean that the 92% of people failed; rather they did not develop and follow through on an actionable plan to achieve their goal.  Most people think they have to be all in or not at all.  All people need to make a goal successful are reasonable or realistic ways to achieve their goals. The number one thing people forget is every little bit counts. In an article by Forbes, "7 Secrets of People Who Keep Their New Year's Resolutions" provides some key insight about how people can motivate and take action moving towards their goals. Here are our 6 Secrets.

 

6 Secrets to Begin Your Estate Plan

 

1. Identify the Why: Understanding the "why" is a big motivational factor.  It forces someone to evaluate the emotional factor that is forcing him or her to elicit change in his or her life.  Whether your reasons to begin an estate plan is to protect your family or for tax saving purposes, everyone should have an estate plan.  Understanding the "why" can help put things into perspective as you go through the estate planning process.  At Kiefaber & Oliva LLP we focus on understanding your "why" for an estate plan.  In our process, we take the time to learn about your goals and concerns before discussing any specific estate planning strategies.

 

2. Make Your Estate Planning Goals Specific/Educate Yourself: Saying, "I'm going to start an estate plan" is a good start, but it is not specific enough in achieving a solid foundation to begin your estate planning process. Before taking action, it is best to understand the basics of estate planning. Our number one goal is to educate our clients before they decide which course of action that they would like to take in achieving their goals. Just like when you meet with a personal trainer at the gym, we go over your personal circumstances, lay out the different course of actions you can take, and show the results you would receive based on which option you choose.  In order for someone to make a sound decision, they need to be educated first. You can do this by:

 

a.     Researching the different types of estate planning documents and find out how each document works.

 

Kiefaber & Oliva LLP sends a monthly educational newsletter that provides estate planning tips and new developments.  If you would like to stay updated on estate planning topics, you can sign up to receive the newsletter here.

 

b. Search for upcoming seminars in your area that will be discussing estate planning, and learn from a professional attorney.  

 

Kiefaber & Oliva LLP firm holds regular educational seminars discussing estate planning.  At our seminars, we do not sell any products, but only educate people regarding estate planning.  Attending one of our seminars is a great way to have a no-obligation and no pressure introduction to estate planning.  To register for one of our upcoming seminars, click here.

 

3. Measure Your Progress: The best tool someone can use to measure daily progress is a checklist. People use a checklist at their jobs, the grocery story, and during their workout routines. It should be no different when it comes your estate plan. Whether you've decided to make a checklist on which estate planning documents you're going to learn about or check off each estate planning document as you complete them, it is good to make a checklist to measure your progress and your next course of action in achieving your goals.

 

            A basic checklist of estate planning documents for any individual (regardless of financial position) should include:

 

-Last Will and Testament

-Durable Power of Attorney

-Medical Power of Attorney

-Advance Healthcare Directive (a Living Will)

-HIPAA Authorization

 

Tips: If you already have an estate plan or prepared an estate plan several years, you should measure your prior estate plan and make sure it still meets your needs.  You can contact us and request your own Estate Plan Check-Up here.  Alternatively, you can schedule a time to review your estate plan with an attorney.

 

Kiefaber & Oliva LLP Checklist:

 

When we work with clients to prepare their estate plans, we use a checklist with each client to ensure their estate plan meets their needs and goals. You can use our checklist as a guide to create your estate plan.

           

a. Take Inventory.  The first step in preparing an estate plan is to review your estate, which means, we review everything you own and that is important to you.  Your estate includes your home, bank accounts, retirement accounts, life insurance, real property, cash and/or bonds, as well as debt.  Another thing to think about (does not necessarily have a monetary value) is family and/or friends.  Would you like to leave gifts to family members, extended family or relatives, charities, or your church?  Also, who would you like to make decisions for you, if you are incapacitated or not capable of making certain decisions?  Do you have any specific instructions regarding your remains - do you want to be cremated or buried?

 

b. Draft Your Estate Plan.  After taking inventory and discussing the best course of action to achieve our clients' goals, we break down each document and go over exactly how they want their estate plan to work. This can vary from whom they want in charge of their finances to whom they want to make medical decisions, as well as, different distributions to beneficiaries (family, friends, and/or charities). Each individual is different, so should their estate plan.

 

c. Execute Documents.  To properly execute estate-planning documents, all drafted documents should be notarized. However, to properly execute a will it needs to be notarized and signed by two witnesses who are not named in the document. Make sure to review your documents after it has been notarized to make sure there are no errors. Possible errors to look for:

           

-       Blank spaces

-       Wrong dates

-       Missing Notary Seal

-       Verify correct spelling of names of witnesses

 

d. Review/Update Your Estate Planning Documents:  We advise our clients to review their estate plan annually.  An annual review of your estate plan ensures that your estate plan is still current with any changes in the law or tax code.  It also makes sure that you have the right people involved in your estate plan, as your executor and power of attorney.  Circumstances and relationships change and often people forget to update documents.  Frequently, people forget to remove an ex-spouse from their estate plan after their divorce and now the ex-spouse has control over financial and medical decisions.  Additionally, some documents may not be relevant anymore, such as guardianship over your children because your children are considered adults now, or your circumstances have changed and a new or revised estate plan may be necessary to take advantage of Medicaid or other benefits.  If you have experienced a major life-changing event (divorce, dying spouse, aging children, adoption, moving etc.), then you should speak with an attorney to update any relevant documents if necessary.

 

4. Schedule it.  Nice job! You've done your research, you've made a strategic checklist, and now you need to commit to picking an attorney. This can be the hardest decision for most people, and at the time when most people create internal roadblocks for themselves in completing their estate plans. Things you can do to decide if an attorney is right for you:

           

-       Research attorneys in your area

-       Check to see if they are speaking at an event (you can get a better understanding of who they are and if you would like to work with them)

-       Check their credentials

-       Schedule an initial consultation

           

Tips: An initial consultation is typically a no-obligation meeting with an attorney that is either complimentary or for a small fee.  At the initial meeting, you will be able to obtain more information about estate planning and which course of action is best for your situation.  An important component of the initial consultation is learning whether you will be working with the attorney or a paralegal or other support staff and if you can see yourself working with the attorney.  At Kiefaber & Oliva LLP, all of our clients work one-on-one with an attorney and our attorneys take the time in the initial meeting to understand your goals and concerns.

 

5. Share Your Estate Planning Goals with Friends and Family.  A support system in place is critical when achieving any goal. The same is true with estate planning. By sharing with your family and/or friends your estate planning goals, then you can determine who you want to take certain roles, such as executor of your estate, and if they are willing to take on the responsibility of the designated role.  After executing your estate planning documents, speak with your family and/or friends to share how your estate plan works and where you will be keeping your important documents.  In doing this step, it will provide a level of comfort during a difficult time. Your family won't need to spend unnecessary time and effort searching for a possibility of a will. They will know exactly where to look and what to do.  Importantly, communicating and sharing your estate plan with family and those involved greatly reduces the chance of family conflict and expensive lawsuits between family members arguing about your estate plan.

 

6. Doing Something is Better than Nothing: If you can believe it, everyone already has an estate plan. What? Yes, this is true. The state where you reside determines how to handle your estate. When you die without any form of an estate plan you have died "intestate."  Intestacy statutes vary from state to state.  If you don't want the government to decide for you how to handle your estate, then make sure to complete your estate plan soon.  Your estate plan must be completed before you are incapacitated or dead (because you can't make any changes after that).  If your estate plan is incomplete, then your family may be faced with the burden of long court proceedings and huge attorney fees.  A great example is the legendary music artist Prince, who passed away early of 2016 and the family is still fighting in court over his presumed $300 million estate.

 

As you have now learned an estate plan is more than just what happens to your property after you pass away.  A complete estate plan includes durable and medical powers of attorney and an advance healthcare directive (also called a living will).  Those documents are just as important, if not more important, than your will.  Those documents determine what will happen to you when you are still alive but are incapacitated.  For example, the advance healthcare directive answers one of the most difficult questions in estate planning: feeding tube or not? The famous Terri Schiavo case in 2005 brought headlines about life-sustaining procedures or the choice to end one's life if considered terminal.  In 1990, Terri Schiavo was a 25-year-old who experienced a full cardiac arrest that ultimately caused substantial brain trauma and damage.  Medical professionals were only able to keep Terri Schiavo alive through the use of artificial life sustaining procedures, specifically a feeding tube.  As Terri Schiavo was kept alive artificially, her husband and parents fought over whether Terri would have wanted the feeding tube removed or not.  Her husband and parents were involved an extensive and expenisve legal battle that went to the U.S. Supreme Court and lasted 15 years.  If Terri Schiavo had executed an advance healthcare directive prior to her injury, then her family would have been spared the stress and heartache of such a prolonged legal battle.  

 

Moving Forward

 

Now that you've made the decision to begin your estate plan, are you going to be part of the elite 8% who complete their new year's resolution? Just as the great Albert Einstein once said, " Learn from yesterday, live for today, and hope for tomorrow." You've made the decision to begin your estate plan, now it's time to put your plan into action.

 

Call us today if you would like to schedule an initial consultation! Call Kiefaber & Oliva LLP at (713) 229-0360.  It's the greatest gift you can give your family all-year-round!

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