Do you have a plan for the future?
In these uncertain times, many people may contemplate making overdue updates to their estate plans – or feel motivated to create one. For many people, death is not something pondered aloud or openly discussed. However, estate planning is more than just talking about the end of life. It is an important part of your loved ones’ futures. Without a plan, your loved ones can be saddled with the responsibility of making assumptions about your desires as they endure the stress of navigating the important decisions necessary for your medical care, finances, and to settle your estate. This can be burdensome and overwhelm your grieving loved ones.
Whether you have lost someone to COVID-19, know someone who has, or feel motivated to navigate important life decisions during this pandemic, now is a good time to create or update your estate plan. Here are a few things to keep in mind as you plan for the future:
Is Your Will Up To Date?
It is good practice to review your will every three to five years and after significant life events including having a child, getting married, financial changes, or getting divorced.
A will is a document that states your intent for everything from property distribution to the care of minor children. Periodic reviews ensure that your will properly accounts for all your assets and accurately distributes your estate to the intended heirs.
It is important to provide a copy of your current estate plan to those family members directly affected by the documents, as well as qualified professionals including the executor, your attorney, and your physician when appropriate.
Are You Taking Advantage of Gift and Estate Tax Exemptions?
The annual gift and estate tax exemption amount may vary from year to year, but it is important to consider as you are working on your estate plan. Currently, you can give up to $15,000 away each year under the gift tax exemption without having to report it tax. Exceeding this amount will reduce the amount of your lifetime exemption. As of 2020, the lifetime exemption is approximately $11.5 million.
While North Carolina does not enforce an estate tax, the federal government does. In fact, the federal government can levy your estate if the value exceeds the applicable lifetime gift and tax exemption. Before making any gift from your estate, it is a good idea to discuss your plan with your estate attorney for guidance on any tax issues that may result immediately and later.
Have You Reviewed Your Powers of Attorney?
A Power of Attorney is arguably one of the most important components of an estate plan. Unforeseen events may leave you incapacitated or unable to make important decisions for yourself. By having a Power of Attorney, you decide who will make these decisions in the event you are unable to – rather than leaving your health, finances, and other important aspects of your life up to the courts.
If you recently got married or divorced or have been diagnosed with a medical condition, it is especially important to review your Power of Attorney to make sure that your life is in the right hands.
Do You Have A Living Will in Place?
Even if you are presently in perfect health, it is wise to have a living will. A Living Will is a document that informs others of your wishes regarding medical treatment.
For example, if you do not want to be placed on life support, would prefer to abstain from certain medications, or have specific wishes about other end-of-life care, a living will speaks for you when you are unable to.
Do You Know Where Important Financial Documents and Logins Are Located?
It is easy to lose track of papers and mindlessly store your login information in your password-protected phone. However, what happens if you become incapacitated and a family member needs to access important physical or electronic documents? If you do not already have a safe deposit box, it is a good investment for safekeeping important original documents like birth certifications, social security cards, and wills.
Having a safety deposit box, or even just a fire safe at home, provides the security your important documents need. You can also record important logins in a small notebook that is kept locked away with your important documents.
However you decide to securely store this sensitive information, make sure to choose a location you can find easily and access when necessary. Not sure which documents you need to keep? Here is a quick explanation of which documents are important and how to keep them organized.
Have You Consulted with An Estate Planning Attorney?
In estate planning, just one wrong word or a missing signature can void the entire thing or completely change the effect of your will or POA. As such, it is vital to seek guidance from an experienced estate planning attorney to ensure your documents are airtight.
Estate planning is ruled by very specific state laws. Creating your estate plan is serious and you will put a lot of thought into creating each component. You deserve to have an experienced attorney guide you through the process, ensuring that each document is carefully drafted to ensure your wishes are clear, effective, and comply with all the detailed nuances required by state law. You deserve peace of mind that are you are gone or incapacitated, your life and estate will be handled in accordance with your wishes.
If you have questions about your estate plan, contact the Wilmington estate planning attorneys at Rountree Losee, LLP today to schedule a consultation.