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Life Stages And Estate Planning

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Estate planning is not a one-time endeavor. Unfortunately many people believe that they do not need an estate plan until they approach retirement.

By Linda T. Cammuso, Esquire

Estate planning is not a one-time endeavor. Unfortunately many people believe that they do not need an estate plan until they approach retirement. Nothing could be further from the truth. Whether you are young or are approaching your middle or senior years, estate planning is a vital tool for protecting your assets and controlling how they are managed when you can no longer do so.  As your life’s situation changes, your goals and objectives change and need to be incorporated into your estate plan.

The life stages at which you need to first create an estate plan and then redo your plan as circumstances change follows.

Planning For Singles

Approximately more than half of all Americans today are single so whether you are in your 20s or 90s you need a plan that includes:

✔️A durable power of attorney, health care proxy, HIPPA release and living will which will enable you to designate who will make decisions for you if you become incapacitated

✔️A will to control who will inherit your assets, and possibly a trust if you name minor beneficiaries

Engaged

✔️You should consider whether a prenuptial agreement is appropriate. Factors may include children from previous relationships, disparity in net worth and expected future inheritances

Married

If you created an estate plan when you were single it’s time to review your plan and develop one that reflects your new life stage to include:

✔️An updated power of attorney, health care proxy and HIPPA release to name your spouse as the person to make basic decisions if you become incapacitated

✔️A revocable living trust for marital estate tax planning and update beneficiary designations if you want to name your spouse as beneficiary of your retirement plans, life insurance policies and pension

✔️Consider purchasing life insurance to ensure each other’s financial security

Parents

Once you become parents, it is important to change your estate plan to:

✔️Update your will to nominate a guardian/conservator for your minor children

✔️Create a revocable trust, or amend your existing trust to ensure your children’s inheritance is properly managed

✔️Establish an emergency guardianship proxy that nominates a guardian to take care of your child if both parents are incapacitated

✔️Review/increase your life insurance coverage

✔️If you have a special needs child, be sure to include a special needs trust in your plan

✔️Update beneficiary designations on life insurance policies and retirement plan, being sure to name your trust (s) and not minor children directly

Grandparents Raising Grandchildren

If you are in this situation, developing an estate plan is important; the process closely mirrors how your plan was developed when you were parents with your own children.

Divorce Or Single Again

Whether you are single again as a result of a divorce or death of a spouse, you need to revisit your estate plan to:

✔️Update documents including beneficiary designations, and revoke durable powers of attorney and health care proxies that name a former spouse

✔️If you remarry, revise your will and trust documents to reflect the proper beneficiaries

Your Middle Years

✔️Your trust should be updated as changes occur (e.g., divorce, additional children, changes in your financial situation, inheritances or increase in net worth, or death of a beneficiary, personal representative or trustee)

✔️Consider purchasing long-term insurance

Retirement Years

✔️Review your estate plan with an attorney to ensure that it takes into consideration MA Uniform Probate Code changes that were enacted in 2012

✔️Review designations on your durable power of attorney, health care proxy and HIPPA release (be sure that the people you’ve named are still in your life and able to serve in that role)

✔️Add provisions to your trust to make distributions to your children or grandchildren, taking into consideration beneficiaries’ creditor exposure or special needs concerns

✔️Consider charitable gifts

✔️Consider reducing the size of your estate through gifting or creating an irrevocable life insurance trust or charitable trust

✔️Evaluate your exposure to long-term care/nursing home costs and consider protective planning to safeguard your estate

✔️Establish a prepaid funeral arrangement

Keep in mind that changes occur during one’s lifetime and those changes warrant regular reviews of your estate plan.

Linda T. Cammuso is a founding partner of Estate Preservation Law Offices located in Worcester, Massachusetts. She is a skilled estate planning and elder law attorney and has authored many articles on elder care and long term estate planning issues. She has appeared on Money Matters Radio and has been a speaker for various community and professional organizations. 

 

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