While it is always important to have your estate plan completed, many clients are especially anxious during this time of the Coronavirus (COVID-19) pandemic.
During this time, it is natural to want to focus on our wellbeing and that of our families. An important part of that process should involve reviewing your current estate planning documents or ensuring that you have those documents in place. What are the ways you can assist your attorney in preparing or updating your estate plan?
Here are some tips in preparing your estate plan.
- Please download our estate planning information form. This is a fillable, savable form. Completing it as much as you can prior to a meeting with estate planning attorneys will help you organize your thoughts and reduce time and attorney’s fees.
- Talk to the people you want to appoint as your personal representative for your will, trustee for your trust, guardian for your children, agent for your power of attorney, and health care representative for your advance directive. You should also appoint backups in the event the primary person is unable to serve. I usually have the same persons handle your funds but often have a different person for the guardian and health care representatives. That way there are not too many cooks in the kitchen! Don’t appoint persons who don’t get along as co-trustees or co-personal representatives.
- Make sure the persons you appoint to handle your funds have the time and skills to do the job. Consider a professional trustee if there is no one in the family with the financial skills that you trust. This could be a bank trust department, a CPA, a private fiduciary, or a private trust company and is especially important if you have a large or complex estate.
- Remember that many of us will have diminished capacity especially as we get into our 80’s and 90’s. Pick someone who will take care of you and your spouse and who has your best intentions and care in mind.
- Talk to your spouse first about beneficiaries of your will or trust. Do you want your children to get lump sums or percentages at certain ages, such as 25, 30 and 35 years of age or do you want an income only trust, or a paycheck type of trust where your children get distributions of 4% of the value of the trust each year paid over 12 months.
- Give the trustee the authority to make discretionary distributions such as paying for college, distributing a down payment for a condo or a house, helping with the expenses of a wedding or for emergencies such as personal injury or illness.
- If one or more of your children predecease you do you want their share to go to your grandchildren by right of representation? Some families also want to make a distribution to a deceased child’s spouse for their support especially in a long term marriage.
- If you have a second marriage, will your assets stay in trust for your spouse or go to them outright. These trusts are called QTIP trusts. If the second spouse is much younger, some people want part of their estate to go to their children at their death with the rest retained to provide for their spouse. IRA’s are a good asset to roll over to the spouse because of the tax deferral provisions for spouses.
- Who will receive your estate if there is a natural disaster or calamity and there are no surviving children or grandchildren? We call these ultimate beneficiaries.
- Talk to your spouse about these issues before meeting your attorney. While the attorney can give you various options to consider, ultimately you jointly have to make decisions if you are using one attorney to do your estate plan.
- After you take care of your family, consider making charitable gifts. These can be smaller specific gifts like $10,000 to a church or favorite charity or larger gifts that are a percentage of the residue after both of you are gone. Again, an IRA is a good way to make a charitable gift since you save both estate and income taxes on the gift.
- Don’t let the tax tail wag the dog. Figure out what you want to do in terms of your beneficiaries and the estate planning attorney will then help you minimize the state and federal estate taxes.
- Preparing an estate plan can be an emotional experience as we are forced to contemplate our mortality. A good estate plan is a process not an event. I recommend that clients review their estate plan every 5 years or when there are life events such as a birth of children or grandchildren, a death of a spouse, a divorce, the receipt of an inheritance or a sudden increase or decrease in the value of your estate.
- Finally, don’t let perfection keep you from completing your estate plan. Some clients get paralyzed on the decisions they have to make. Get something in place and you can always modify it later!
We are available to discuss your individual and family circumstances and how we can help to bring you peace of mind during these times. While you may feel confident you have an estate plan in place, life changes frequently happen and tax codes will change. It is essential to review and update your documents so that your wishes are carried out in a timely and efficient manner.
The estate planning team here at Buckley Law are ready and willing to help you with your estate plan. We are all working remotely during this difficult time to help our clients with their estate planning goals.
Rob Le Chevallier
Rob Le Chevallier practices business law, business formation, estate planning, trust administration, real estate law, and corporate financing at Buckley Law P.C. He particularly focuses on the estate planning needs of business owners and other high net-worth individuals and their families. He is an attorney and shareholder at Buckley Law and is licensed in Oregon and Washington.
The information contained in this article is for informational purposes only and does not constitute legal advice. This information is not intended to create an attorney-client relationship, and the receipt or viewing of it does not create or constitute an attorney-client relationship. You should not act upon any information contained in this article without consulting an attorney for individual advice regarding your own situation.