My husband, Tom, and I recently updated our estate planning. I recommend my clients review their documents at least every 5 years or as their circumstances change (marriage, divorce, inheritance, birth or adoption of a child). This seems to be an item that can easily stay on one’s “to do” list for a year or more. Many times estate planning is put off because of the decisions which must be made regarding the disposition of your assets after death, choosing who will be your children’s guardians’ or your power of attorney.
As Tom and I struggled with beneficiaries and contingent powers of attorney, there were two very helpful points that our attorney, Jeff, brought up which made the whole process a lot easier.
First, it can be difficult to decide who will serve as your executor, trustee, power of attorney, etc… because we are often wondering what happens when/if that person predeceases us. Our attorney told us not to worry about 10 or 20 years in the future, but to think about today. If something happens to Tom and/or me now, what do we want in place? We were able to make our choices much more quickly when we weren’t worrying about appointing a parent as a successor power of attorney because we are likely to outlive them. As our lives change, we will update our plan, as needed.
The second advice was with regards to naming beneficiaries. Tom and I do not have children, so our inclination was to divide our estate between our parents, my sister and niece and nephew. Jeff asked if an inheritance would make a meaningful change to our parent’s lives, and, in most cases, the answer was no. We were also hesitant to leave a large inheritance to our niece and nephew. By observing the way people handle a sudden windfall, I have witnessed many instances where money causes more problems than it solves. After further discussion, we realized our goal was to help our family members with the greatest need and also use our estate to truly make a difference in the lives of others through charitable gifts.
By simply suggesting that we look at things differently, we were able to enjoy the process instead of looking at it as a chore. If you are putting off your estate planning because this seems easier than the decisions that you will face, try looking at it from a different angle. Make sure your estate documents set up so that you are comfortable with the decisions you have made if something were to happen to you tomorrow – and not just 20 years from now.
Christine Carleton, CFP®