Commentary: Address estate planning early in new year
January 30, 2014
If you did not state a New Year's resolution because you figured that you would not keep it and that it was not all that important anyway, I ask you to reconsider and make a point of addressing something so important that it could cost your family thousands of dollars and potentially broken relationships.
I am talking about addressing your family's estate planning. Whether it is as simple as writing a basic will or having your current plan reviewed, to tackling your complex situation that includes ex-spouses, step-children or family businesses, now is the time to contact a qualified and experienced estate planning attorney and make an appointment.
Even though the estate tax exemption is now $5.34 million per person, there are still plenty of good reasons to have a sound estate plan in place.
First of all, you will legally state who will inherit your assets and, more importantly, who will make financial and medical decisions for you, should you become incapacitated.
This is even more important should you have a blended family, where there are multiple spouses and multiple children. If you do not have a plan in place, the state which you reside in will decide for you, in accordance with probate laws of that state.
Not only do your heirs lose control, they may have to pay additional court and lawyer fees and you are subject to the judicial process, which can be lengthy.
Estate planning is generally a one-time event. As your life changes, so can your estate plan.
Therefore, once you complete one, you should have it reviewed at least every five years, just to make sure that it is current with the estate tax laws.
Recently, my estate planning attorney retired and I took that opportunity to have my plan reviewed with my new one. I had not realized that it had been seven years since my last review and in that time span, three of my four children had become adults and one had married.
This changed our situation, and we now need to decide what changes we should make.
Decisions like, should our 23-year-old daughter now be guardian of our 15-year-old son or should it be kept as is.
In addition, should we have our oldest children receive full inheritance or still have it spread out to age 35? Lastly, do we want to change our bequests to charity and, if so, which ones.
Estate planning encompasses so many crucial aspects of our life, yet it may be the most neglected part of overall planning.
Make this the year that you address your estate planning needs by contacting one of your other financial professionals for a referral.
Estate planning can involve a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional before implementing any strategy.
Frederick Fisher is a CFP® and insurance agent. Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a registered investment adviser. Ostrofe Financial and NPC are separate and unrelated companies. For questions or suggestions, contact Fisher at 530-273-4425, or firstname.lastname@example.org.
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