Having an estate plan is the best gift you can give your family. Every family has its unique relationships, interactions, and yes, challenges. Can we talk frankly about Thanksgiving dinner? It’s often difficult for us to see our own situations and to plan accordingly. Proper planning can mean that your assets will be distributed to loved ones and charitable organizations that are meaningful to you in a way that takes care of your family as well as provides impact and peace of mind.
What should you know when working with an estate attorney? Many will tell you that the statement they hear most often from clients at the first meeting is, “My estate plan will be simple.” As the attorney starts to ask questions, the answers from you may not flow easily. Questions like:
- Who do you want to benefit from your estate? Just family? Family and charitable organizations?
- If you want to include charitable organizations, have you told your family?
- Are you aware that some inherited assets are taxable income for individuals? Do family members know this?
- Who do you want to name as the executor/trustee of your estate?
Beyond family matters, there are technical issues that are best left to the attorney. It is a common misconception that all assets in an estate will be distributed to those individuals or charities specified in a will. However, there are assets—often substantial—that will not be distributed by the terms in the will. Assets in IRA, 401(k), and 403(b) retirement accounts and life insurance policies are examples. These accounts have separate forms where the owner of the account or policy can designate who is to receive the assets upon the passing of the owner. You might have updated your will as family dynamics changed, but did you also remember to review these beneficiary designation forms? Also, taxes can potentially be saved with proper estate planning. A competent and detailed estate planning attorney can guide you through the process.
As part of your estate planning process, have a discussion with your heirs. This may not be easy, but it will help avoid speculation and possible friction related to the plan you put in place, especially at a time when you are no longer around to explain. If you plan to include charitable organizations, be sure family members know this. Explain why it is meaningful to you and, if possible, share the names of your heirs with the institution(s). If it is an endowed or capital gift, heirs could opt to receive updates on funds or scholarships or be present at a dedication ceremony—wonderful ways in which you can continue to be present in their lives.
Your inheritance to loved ones will go beyond bank accounts and tangible objects, and will hopefully include a lifetime filled with fond memories. A thoughtful estate plan can secure those memories and provide opportunities for future generations.