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Recent Empty Nester? You Are Not Alone! It's Time to Create/Update Your Estate Plan


A major life event is about to happen or will happen soon. College acceptance letters are probably sitting on your kitchen counter, and you've finally come to realize that your last child is all grown up and about to leave for college. Along with your last child leaving the nest, your longest identity of being a parent is about to change dramatically. It can be an exciting time, but it can also be bitter sweet to see an empty chair at the dinner table every night. The hardest part about being a parent is letting go of your child once he or she has reached adulthood and trust that he or she will make good decisions on their own. Even though your child is now considered to be an adult, you can still protect them in the long run by having an estate plan.

As a parent, you probably can't imagine a day where roles will be reversed and you become dependent on your child. How can you? However, despite our best efforts we cannot ignore the reality that we are getting older and at some point will pass away. Unless someone has found the fountain of youth, hopefully soon, there will come a time where you will pass and leave behind your legacy. With that being said, the best way a parent can protect his or her child is to have an estate plan. By planning ahead and already having laid out personal instructions, your family will know exactly what to do in the event that you become incapacitated or have passed away. Estate planning is about answering the difficult questions ahead of time, so you don't have to leave it up to your family to decide during the most challenging time when they are grieving. For example, if you become incapacitated and only life-sustaining measures are keeping you alive, would you want a loved one to make the decision about pulling the plug? Or would you want to relieve your loved ones of that burden and make the decision for yourself ahead of time?

If you are at the beginning stages of planning your estate or need a refresher about the different estate planning documents, click here to read more about understanding the basics of estate planning.

Here at Kiefaber & Oliva LLP, we work with our clients to ensure each comprehensive estate plan is tailored to meet our clients' needs. A comprehensive estate plan will do more than protect your legacy, avoiding probate and taxes, it should also include a plan to manage your affairs if you become mentally incapacitated or cognitively impaired during your life. The Center for Disease Control has reported that as the Baby Boomer generation ages and lives longer than prior generations, the number of people living with cognitive impairment is expected to at least double or triple. Many estate plans do not adequately address incapacity of cognitive impairment, and, as a result, spouses and families are left to struggle with rising medical costs and the aftermath of incomplete estate planning.

10 Questions to Consider Before Beginning/Updating Your Estate Plan

1. Does my estate plan transfer my hard-earned assets to the people I want and in the manner that I choose?

2. Does my estate plan provide protection for my spouse and/or children after I am gone?

3. Does my estate plan include a custom plan to protect me in the event of incapacity or disability?

4. Does my estate plan maximize the value of retirement accounts by "stretching-out" the amount of tax-free or tax-deferred growth?

5. Does my estate plan protect my assets from bankruptcy, lawsuits, judgments, creditors and divorce?

6. Does my estate plan provide flexibility to address changes in tax law and minimize possible estate taxes?

7. Does my estate plan articulate my medical wishes, including end of life decisions?

8. Do I fully understand the different estate planning documents and how they work together?

9. Are there changes in the law or in my relationships that will change the outcome of my estate plan?

10. Do I want to have an estate that meets my goals and objectives, minimize taxes and provides protection for myself, my spouse and/or children under a variety of circumstances?

Unless you have already completed a comprehensive estate plan prepared by an attorney, then it is normal for most of your answers to these 10 questions to be no. However, you do not need to leave your care and your family's future to chance; you can positively answer these questions when you speak with an attorney to review your current circumstances and your estate planning goals.

Steps After Completing Your Estate Plan

After going over the necessary steps in completing your estate plan, then you should be thinking about the next time your family is altogether to go over your estate plan and where you will be storing all of your important documents.

Some important documents you should put with your estate plan include:

- Account statements - These may include bank statements and investment account statements (including brokerage accounts, IRAs, 401(k)s, Roth IRAs, annuities, pensions, and savings accounts).

- Life insurance policies - Because beneficiaries will automatically receive the policy proceeds directly after you have passed, you should review your beneficiaries annually to make sure that these proceeds will continue to go to the right people.

- Deeds for real estate - If you are unable to locate the original deed, many states now allow you to view and print deeds online. Note: your family will not need the original deed to sell property.

- Automobile and boat titles - a duplicate original can be ordered from the department of motor vehicles. Alternatively, some states will allow the transfer of a vehicle title without the original for an additional fee.

- Stock and bond certificates - This may include corporate certificates, local and state bonds, and U.S. savings bonds. Note: your appointed personal representative of your estate can file a lost certificate affidavit.

- Business documents - If you own a small business, keep together all business-related documents, including bank and investment statements, corporate records, income tax returns, business licenses, deeds for real estate, loan documents, contracts, utility bills, and employee records.

- Bills - This will include utilities (electric, gas, water, sewer, garbage), cell phones, credit cards, personal loans, property taxes, insurance (real estate, automobile, boat), storage units, and medical bills. This will allow your personal representative to know which debts should be paid off to settle your estate.

- Estate planning documents - This may include a Last Will and Testament, any Codicil(s) to the will, a Revocable Living Trust, and any Amendment(s) to the trust. Along with powers of attorney, medical directives, and other documents.

- Other legal documents - This may include a Prenuptial Agreement and any Amendment(s), a Postnuptial Agreement and any Amendment(s), leases (real estate, automobile), and loan documents (personal loans, mortgages, lines of credit).

- Tax returns - This should include gift tax returns and the past three years of state and federal income tax returns.

- Digital Assets - This is commonly overlooked. On a separate piece of paper, you should write down all of your online accounts and passwords. This will allow your family the ability to remove your email address, Facebook, online bank accounts, Youtube, Twitter, Pinterest, Paypal, etc. In doing this, it will significantly reduce the risk of your estate from fraud or being hacked.

After you compile all of your documents, then you should store your original documents in a safe place. Most people store their documents either in a safe deposit box or fireproof file cabinet.

Review Your Estate Plan Annually

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. For example, even though your child will always be your baby, your relationship has changed because he or she is an adult now. With that being said, guardianship over your child now is irrelevant because he or she is no longer a minor; however, you may now want to add your child as the executor of your estate. 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.

Contact Kiefaber & Oliva, LLP

Becoming an empty nester can be a difficult transition, but it does not mean that you stop being a parent. You can still do something as a parent to protect your family. Planning your estate provides the overall feeling of contentment knowing that no matter what happens to you, your family will be protected, even after you are gone. Contact Kiefaber & Oliva LLP to schedule an initial consultation. Contact us at (713) 229-0360.

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