This is the time of year when New Year’s resolutions about getting an estate plan done (finally) bring people to my office. Others may decide to take matters into their own hands. As an estate planning attorney, I am not a big fan of do-it-yourself estate plans. Whether it’s a so-called Will handwritten on a napkin, or documents created using LegalZoom or any of the other on-line tools, I have never seen a Will or other estate plan document drafted by a client work as intended. For a variety of reasons, these documents are at worst invalid and at best poorly written, creating ambiguity and inevitably leading to more time and expense in the estate settlement process, which is precisely what the drafter was, I suspect, trying to avoid. There is no substitute for an experienced estate planning attorney if you want to create an estate plan that will be valid, cost-effective, and accomplish your goals. However, there are certain things you can do yourself that will go a long way toward ensuring that your estate plan works as you intend. Here are five of them:
- Get Organized. One of the first tasks someone will need to complete after your death is to identify your assets. Your family will thank you if it is easy for them to figure out what you own and where your assets are located. Take the time once a year to create a list of your assets – bank accounts, investment accounts, real estate, life insurance policies, annuity contracts, IRA and 401k accounts, etc. Include the institution and the account number. Include information about any safe deposit box you may have and where the key is located. If you have a safe or other place you store assets or important papers in your home, make sure that is on the list. Finally, and despite all advice to the contrary, include your passwords to online financial, social media, email and other accounts. Without that information, timely access to your digital assets may be impossible. After you create this list, update it at least once a year. Then, put it somewhere where it will be easily found if something happens to you. If you have a filing cabinet where you keep your asset information, put the list in the front of the cabinet. Another good option is to make a 3-ring binder where you keep the list along with your most recent account statements. Organizing the paperwork related to those assets in one location is also a plus. Any method that works for you is OK. Keep your estate plan documents and the contact information for your attorney, your financial advisor and your accountant in the same location. Then, tell the person you have named as Personal Representative in your Will what to do when you are gone. It’s enough to say, “If I get hit by a bus tomorrow, go to the bottom drawer of the filing cabinet in the den and you’ll find everything you need there.” A little organization and information will make things a lot easier for your family to pick up the pieces when the time comes.
- Check Beneficiary Designations. Identify the assets you own that have beneficiaries designated to receive those assets when you pass away – for example, life insurance policies, annuities, IRAs, 401ks and other retirement accounts. Check with those companies, or with your employer, to confirm who you have designated as the primary beneficiary on a particular policy or account (to receive the asset at your death). Make sure the primary beneficiary is still the person you want to receive that asset. If your designated beneficiary is no longer a good choice, obtain the appropriate form and change the beneficiary – now. Also, confirm that you have designated a contingent beneficiary who will receive the asset if the primary beneficiary is not living at your death, and if you haven’t done so, designate an appropriate contingent beneficiary or beneficiaries. If the beneficiaries you wish to designate are under the age of 18, make sure you understand how the company in question will handle things at your death. It may be that they will require a court-appointed conservator for a minor before money can be paid to the beneficiary. This is a time consuming and expensive process. Generally, designating a trust for the benefit of a minor beneficiary is a better approach. If you have large retirement accounts, make sure you understand the rules that will require minimum distributions from those accounts each year to non-spouse beneficiaries after your death, regardless of their age, and the income tax implications to your beneficiaries.
- Specifically Identify Special Items. Your tangible personal property – the contents of your home, your car, your jewelry, your boat – are often overlooked in considering how assets will be distributed at death. If you have tangible property of significant monetary or sentimental value, consider being specific about who should receive these items at your death. Create a list of the items and the people you would like to receive them. Sign and date the list, and re-sign and re-date it when you make changes. Keep the list with your asset list (see #1 above) or with your estate plan documents. This will go a long way to avoid disagreements following your death about who should receive Mom’s engagement ring, grandma’s rocker, or the family’s prized Revolutionary War musket that needs a caretaker that understands and will respect its significance.
- Leave Instructions – About your Kids. One of the hardest but most valuable things you can do is write a letter of instruction to your children’s guardian about how you would like your children to be raised if you are not around to do it yourself. As a parent, it is very difficult to imagine what your children’s life would be like if you are no longer there. However, all parents have hopes and dreams for their children, as well as practical information about their children that would be useful for someone to have. So, write it down. “Dear Guardian, If I am no longer living, these are the things I want you to know about my children…” Start with the mundane – who their doctors are, what allergies they have, what they like and don’t like (particular food, scary movies, clowns). Continue with what you hope they will have the opportunity to do in the future – music lessons, a particular summer camp, time each year to visit with extended family who may live far away. This is a letter you will need to commit to updating as time goes on, since as your children get older much of this information will change. It’s not an easy thing to do or commit to keeping updated. However, this kind of information can be invaluable for those who are left to care for your children, and can also give you some peace of mind that if your wishes are known they will be carried out. Keep the letter with your estate plan documents and your asset list.
- Name Legacy Contacts. If you use email or social media, consider naming a legacy contact to whom you can give permission to access your “digital assets” stored with that company after your death. For example, Facebook allows you to designate a Legacy Contact (Settings/General Account Settings/Manage Account) who can manage your account after your die, or you can choose to have your account deleted if you pass away. Google allows you to control what happens to your account through their Inactive Account Manager feature (My Account/Personal Info and Privacy/Control your Content), where you can designate when your account will be considered inactive and what will happen to your Google account, and designate one or more people who will have access to whatever portions of your Google account you choose. Keep in mind that if you do not use an online entity’s prescribed method of giving someone permission to access your account, and do not provide express permission and direction in your estate plan documents, the company’s Terms of Service Agreement will govern. In such a case, you and your digital assets are at the mercy of the online provider, which may not allow access following your death or incapacity.
Estate planning is not as easy as do-it-yourself websites may have you believe, and I would not recommend that you try it at home. Work with an experienced estate planning attorney to create estate plan documents that are appropriate for you and that will accomplish your goals after you are gone. In addition, consider taking the steps described above to make things easier for those you leave behind.
Maria Baler, Esq. is an estate planning and elder law attorney and partner at Samuel, Sayward & Baler LLC, a law firm based in Dedham. She is also a former director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA). For more information, visit www.ssbllc.com or call (781) 461-1020. 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.
© 2018 Samuel, Sayward & Baler LLC