Your Estate Plan—What You Need to Do Right Now

Jim Niedzinski, AIF®
Jim Niedzinski, AIF®

If it has been longer than five years since your estate plan was reviewed, you need a check-up.  Like your teeth or car, your estate documents require regular maintenance.  The world is changing and so are you—new federal tax laws are enacted and state requirements are revised; children and grandchildren are born and homes are bought and sold.  Your estate plan needs to keep up with the pace of change or your loved ones can be stuck with a handful of heartache.

Updating your estate plan doesn’t have to be painful.  If you have an advisor team that you trust, contact them for a review of your estate plan.  If you don’t, contact us for help:  (248) 971-7509  or email info@WealthCareAdvisors.com.  Call or email now—it will take less time than you think.

To prepare for your review, refresh yourself on the five key documents of a basic estate plan:

Will

A will directs who inherits your assets. While assets can also be passed to heirs via a revocable living trust (explained below), a will is always required to direct assets that may not have been titled to the trust.

A will also names a legal guardian for minor children or dependents with special needs.

Revocable Living Trust

A revocable living trust is a separate legal entity created by you to own your assets. The trust will direct the transfer of these assets upon your death.

Unlike assets transferred via a will, trust assets avoid probate.  Probate is a legal process that occurs after someone dies involving paperwork and court filings that add cost and delay to the settlement of your estate.    

Avoiding probate is also desirable if you’re concerned about privacy. Probated documents (e.g., the will, list of assets) become a matter of public record.

While you may not be able to avoid probate completely, a trust can greatly reduce the number of assets that go through probate and simplify the process for those that do.

A trust can also be crafted to provide additional protection after you pass away, potentially shielding your heir’s trust assets from divorce, creditors and mismanagement.

Durable Power of Attorney

A durable power of attorney (DPOA) enables you to authorize someone else to handle financial and legal matters on your behalf, such as paying expenses, managing investments, and filing taxes.

There are two types of DPOAs:

  1. Immediate—effective when executed
  2. Springing—effective when you become incapacitated

Advanced Medical Directives

Advanced medical directives declare what medical treatment you would or would not like to receive, as well as appoint a Patient Advocate to make medical decisions on your behalf in the event you are unable.

There are three types of advanced medical directives, although what is allowed varies by state:

  1. A living will allows you to approve or decline certain types of medical care
  2. A health care DPOA allows you to appoint a representative to make certain medical decisions on your behalf
  3. A Do Not Resuscitate order (DNR) directs medical personnel not to perform CPR if you go into cardiac arrest

Letter of Instruction

A letter of instruction is an informal document that can be used to express your personal thoughts and directions on topics such as your burial wishes or where to find important documents. These instructions are only suggestions and are not legally binding.

Unlike your will, a letter of instruction remains private and is therefore an opportunity to say things to heirs you would rather not make public.

Please contact us for assistance with establishing your estate plan or reviewing your current plan for possible updates and improvements.