Did you know that the third week in October is National Estate Planning Awareness Week, officially designated as such by the U.S. House of Representatives in 2008?   The Resolution passed by the House noted that “it is estimated that over 120 million Americans do not have up-to-date estate plans to protect themselves or their families in the event of sickness, accidents, or untimely death.”  Using math skills I have not used since middle school, and based on figures from the 2013 U.S. Census, I calculated that slightly less than 50 percent of adult Americans do not have an up-to-date estate plan.

Here are five things you should know about estate planning that will motivate you to create an estate plan or update your out-of-date plan just in case you’re one of those 120 million.

1. It’s Not as Complicated or as Scary as it Sounds. According to the American Bar Association, estate planning is “a process by which an individual designs a strategy and executes a will, trust agreement, or other documents to provide for the administration of his or her assets upon his or her incapacity or death.  Tax and liquidity planning are part of this process.” Although no one likes to think about death or incapacity, the hard reality is that all of us will pass away, and many of us will experience a period of incapacity before that happens.  Like any major life event, it is better to prepare for it before it happens, rather than to deal with it when it’s happening.  A thoughtful estate plan is one that is done in advance, when you are healthy and can think clearly about what you would want and who is best suited to assist you.  And contrary to superstition, in 27 years of practice I have never had a client die immediately after signing his Will. In fact, clients universally feel relieved after finishing their planning.

2. A Good Estate Plan starts with Education. Like anything else, before you can make good decisions about your estate plan, you need to become educated.  If you are the type who likes to read up on things before you embark on a new endeavor, there is an abundance of information on estate planning available online or in your local library.  If you are not so inclined, make an appointment with a good estate planning attorney who should spend most of the initial meeting educating you about different estate plan documents – Wills, Powers of Attorney, Health Care Proxies, Trusts – the purpose of each, and which are appropriate for your particular situation.

3. A Good Estate Plan is Not Necessarily Complicated, Just Right for You. Estate plans can be very simple or very complex, depending on the situation.  A complicated estate plan is not appropriate for everyone.  The plan that is right for you depends on your family situation, your planning goals, and your assets.    If you have a young family, your priorities are likely to include creating a Will in order to name a guardian who will care for your children if you are unable to do so, and creating a trust to ensure your children do not receive their inheritance at age 18 when they are too young to handle it responsibly.  If you are nearing retirement, perhaps you are concerned with saving estate taxes for your heirs and protecting your hard-earned assets from a child’s creditors or divorcing spouse.  If you are in your senior years, you may want to be sure you have named people to assist you with financial and health care decisions as you age. You may also want to better understand how to pay for long-term care should you need that care. An experienced estate planning attorney will spend time discussing how an estate plan can meet your objectives and the options available to you to accomplish your goals.

4. A Comprehensive Estate Plan Does Not Stop at Legal Documents. Although completing your estate plan documents is a great start to the planning process, you are not done yet!  An important part of a complete estate plan is making sure your assets are owned in a manner a consistent with your estate plan documents.  Reviewing and understanding the implications of the beneficiary designations on your retirement accounts is important, especially if you have significant assets in these accounts.  Considering whether life and/or disability insurance could benefit your family is another component of planning, especially for young families.   For these reasons, you will want to involve your financial advisor in the estate planning process.  Your financial advisor can work with you and your estate planning attorney to address the financial aspects of planning and make sure your financial plan is consistent with your estate plan.  It is a good idea for your advisors to work together to coordinate the planning they do on your behalf.

5. Don’t Forget to Update! It is hard to believe, given how much fun estate planning can be, that people fail to update their plan once they have put one in place.  Your family and financial situation will change during your lifetime and your estate plan must change with it.  As a general rule, I like to meet with my clients at least once every five years to review: 1) their documents, 2) how their assets are titled, 3) their beneficiary designations, and, 4) their current situation, goals and objectives.  As there can be a lot to think about in the estate planning process, it helps to break the process down into smaller tasks.   Think about the plan that would be best for your family now and then review and update it as time goes on.  This approach makes the planning process manageable. As long as you are diligent about reviewing and updating your plan, it ensures you will always have a plan that works for your current situation.

Before the holiday season is in full swing, and in honor of national Estate Planning Awareness Week, make it a point to get your estate plan in order, whether you are just starting or need to update your existing plan.  If you need a bit more time, put your estate plan on your list of New Year’s resolutions and make sure it’s a resolution you keep in the New Year.  You will feel good knowing you have done all you can to prepare and protect yourself, your spouse, your children, or others you care about in the event something happens to you.  Your loved ones will thank you!

November 2014

Attorney Maria C. Baler is an estate planning and elder law attorney and a partner with the Dedham law firm of Samuel, Sayward & Baler LLC.  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information, visit www.ssbllc.com or call (781) 461-1020.