Do I Need a Will? Short Answer: Maybe.

*This post does not, and is not intended to, provide legal or tax advice.  Individuals seeking such advice should contact a qualified professional. 

The coronavirus has upended our lives and lifestyle.  Not only are we keeping our distance and washing our hands more often, but recent headlines have many thinking about the unthinkable:  death and dying.  As a result, estate planning, once a topic of interest of the elderly and wealthy, is now of interest to many, regardless of age or means. 

Estate planning describes planning for the transfer or management of one’s estate (all property owned, including cash, clothes, cars, houses, financial accounts, etc.) upon incapacitation or death.  Estate planning professionals, such as attorneys and accountants, work with clients in an effort to ensure the estate is transferred to individuals or organizations as desired, tax liability is minimized, and minor children are provided for through named guardians.  What happens if you die without a will or other estate planning document specifying who is to receive your property or care for your children?  Your property will be distributed in accordance with applicable state law and a judge will determine your children’s caretaker.    

Once upon a time, creating a will required appointments with an attorney and/or an accountant.  Today, companies offer online estate planning customization through apps and programs.  Regardless of how—or when–you decide to plan for the future, here are some tips to get you started.   

Before contacting an estate planning professional or business:

List what you own.  Be exhaustive.  Think large, such as land, homes, vehicles, life insurance, and financial accounts (e.g., bank accounts, certificate of deposits, retirement accounts, stocks, bonds, mutual funds, health savings accounts, etc.).  Think small, such as jewelry, clothing, collectibles and furniture.  And think of everything in between.  

Think about your family.  If you have minor children, who do you want to care for them?  Does your partner agree?  Talk to the person you wish to designate—are they willing to do so?  Yes?  Great.  Now, think of a back-up guardian to be named and repeat the process.       

Update your beneficiaries.  Upon death, some assets, such as certain bank accounts, retirement accounts, and life insurance, transfer to individuals named as beneficiaries.  Account owners are able to list one or more primary beneficiary (his/she stands first in line to receive benefits), as well as one or more contingent beneficiary (he/she receives benefits if the primary beneficiary cannot be located, is deceased, or refuses the asset).  Account beneficiaries should be reviewed regularly and updated as needed.

Consider incapacitation.  If you are unable to act for yourself, whether as a result of physical or mental incapacity, is there someone you would want to make healthcare decisions on your behalf?  If so, you may be interested in a health care proxy (also referred to as a health care power of attorney or advance directive).  Would you want someone to manage and control your finances?  Yes?  Learn how a power of attorney can help.  Do you have preferences for your care and treatment in times of a medical emergency?  If so, read about living wills.     

Once you have a plan in place, it should be reviewed periodically, as well as upon any significant life event, such as a birth, a death, a marriage, a divorce, or a significant move.  

For a glossary of estate planning terms, click here.

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