Are You Ready?

     If you were incapacitated or died today, what would happen to your loved ones and your property? Who would assume responsibility to make sure everything was okay? How would anyone know your plans for the care of your loved ones and your property? Even if you have answered these fundamental questions through proper estate planning, it is important to review your answers periodically, because they may change over time. To help ensure that your review is thorough, remember to cover the Three P’s of proper estate planning: People, Property and Plans.

Your People

     Our life experiences are enriched by the relationships we develop with other people. Who are the important people in your life? Depending on your unique circumstances, your list may include your spouse, children, grandchildren, parents, siblings, nephews, nieces or friends. Beyond these, your important “people” also may include worthy causes, charities, and even pets.

Your Property

     The term property includes not only real estate, but all of your assets, regardless of form. What property have you accumulated? Have you inventoried and valued your things? Do not forget tangible personal property, such as heirlooms and antiques, for which sentimental value can far exceed appraised value.

Your Plans

     At the foundation of every comprehensive estate plan is the selection and appointment of successor decision-makers to make personal, health care and financial decisions in the event of your incapacity. Likely such successors would continue to manage your property following your death, as well. Whom have you appointed as your successor decision-makers? Do they have the time and expertise to serve? Would it be wise to appoint professionals to help them with the details? Professionals, such as trust companies or accountants, may be more appropriate given your unique circumstances. In addition, if you have minor children, have you appointed guardians to ensure that your children would be reared in a loving home should they be orphaned?
     Issues surrounding the division and distribution of property can shipwreck family relationships. Do you have sentimental, one-of-a-kind items? Studies show that many family fall-outs result from failure to make legal arrangements for the distribution of these sentimental items.
     Do you have a family business? Two-thirds of family businesses fail to survive the exchange from one generation to the next, largely because they have no succession plans. Who among your children will inherit your business? Have you made arrangements in your estate plan to treat your other children fairly, if not equally? Will your plan discourage or even prevent conflict among your heirs?
     Is yours a blended family? If so, what plans have you made regarding the treatment of your property upon your death? How will you honor your vows to provide for your surviving spouse and still fulfill your desire to leave an inheritance for your own children from a prior marriage? Does your estate plan protect any inheritance left for your surviving spouse from a potential next spouse?
     Divorces, lawsuits, bankruptcies and affluenza can wipe out an inheritance virtually overnight. Does your estate plan protect any inheritance both for and from your children (and their possible future misfortunes)?
     Given the certainty over the uncertain future of the death tax, does your estate plan contain the necessary flexibility to achieve tax minimization goals? If not, the IRS may be one of your heirs.

Summary

     Failure to make and maintain proper estate plans for the important people in your life and for your property can lead to family fall-outs, litigation and other unpleasant consequences. Reviewing the Three P’s of your estate plan could help avoid them.