Seasonal Solutions

     Life is lived in stages. The rhythm of our lives mirrors the rhythm of the natural seasons. Whether you are in the spring, summer, autumn or winter of life, your Life & Estate Planning objectives will inevitably change. This article is relevant regardless of whether you currently have a Life & Estate Plan. If you do not have a Life & Estate Plan, it will help you appreciate the need for proper planning. If you already have a Life & Estate Plan, it will reinforce the need to keep your Plan up-to-date as you move between seasons.

Spring

     In the context of Life & Estate Planning, spring begins on your 18th birthday. On that magical day you become responsible for your own personal, health care and financial decisions. The adults in your life suddenly become your peers in a legal sense.
     Unless you give your parents proper legal authority in advance, they cannot make your personal, health care or financial decisions on your behalf should you become incapacitated due to an injury or an illness. For example, they would not be able to select a rehabilitation setting for you, have access to your medical records, represent your interests regarding the course of your treatment or even file your income tax return. The failure to make proper legal plans in advance could force you and your parents into the Incapacity Probate process by default, because these decisions must be made even if you are unable to make them yourself. Making proper legal plans now could avoid creating potential problems for your parents later.

Summer

     As you grow older, you may get married. It has been said that a marriage may be made in Heaven, but the maintenance must be done on earth. As part of your marital maintenance, you should review and update your Life & Estate Plan. For instance, you may want to update your legal plans to appoint your spouse as the primary decision-maker for personal, health care and financial decisions. In addition, make sure that your separate and mutual assets would be distributed as desired should either spouse predecease, or in the event of your simultaneous deaths.
     First comes love, then comes marriage, often followed by a baby carriage. If you have children, make sure your legal plans are updated to appoint back-up parents should your minor children be left without parents.

Autumn

     When your children become adults, you may wish to update your legal plans again, appointing your children as secondary decision-makers should your spouse be unable to serve. You also may consider creating Long-Term Discretionary Trusts for your children to protect their inheritance both from them and for them. Otherwise, your financial legacy could be lost to squandering, divorces, lawsuits and bankruptcies.
     While you are at it, consider including remarriage protection provisions in your legal plans. What would happen to your childrens’ inheritance in the event that you predecease your spouse, they remarry, and their next spouse inherits proceeds from your estate? You can protect your own children’s inheritance with provisions to disinherit your surviving spouse’s next spouse in the event you predecease, and your surviving spouse remarries.
     Is a family business a major asset in your estate? If so, proper business succession planning is a must to preserve both the business and your family relationships.

Winter

     You may consider exploring two advanced, and often overlooked, legal planning options. By maximizing a tax exemption known as the Generation-Skipping Transfer Tax Exemption, you may be able to leave more wealth to your descendants
     You also may want to consider making proper legal plans for the distribution of your charitable legacy to your favorite causes and institutions. In fact, many of the charitable legal plans available can help increase your current income and offer valuable tax deductions!

The Three P's Protocol

     Quick. 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 planning and reviews are thorough, remember to cover the Three P’s of proper estate planning: People, Property & Plans.

Your People

     From the time we are born until we die, 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 (even great-grandchildren), parents, siblings, nephews, nieces or friends. Beyond these, your important people also may include religious and non-religious charities, as well as pets.

Your Property

     In addition to the relationships we accumulate with other people during our lifetimes, we tend also to accumulate property along the way. In this context, property includes more than just real property (i.e., real estate), but consists of all of your assets regardless of form. What property have you accumulated? Have you inventoried and valued your things…or will you send your loved ones on a (very unpleasant and time consuming) treasure hunt ?

Your Plans

     The foundation of every comprehensive estate plan is the selection and appointment of your successor decision-makers to make your 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.
     Who have you appointed as your successor decision-makers? Do they have the time and expertise to serve? Would it be wise to appoint professional assistance to help them with the details?
     Perhaps a professional successor decision-maker, such as a trust company or a certified public accountant, is more appropriate given your unique circumstances.
     Issues surrounding the division and distribution of property can shipwreck family relationships upon the death of the property owner.
     Do you have sentimental, one-of-a-kind items? A recent study found that most family fall-outs result over the failure to make legal arrangements for such items.
     In conclusion, time spent on your Three P’s will be time well spent. Poor (or non-existent) inheritance planning can cause the loss of a family business, blended family brawls, affluenza among idle heirs (along with their divorces, lawsuits and bankruptcies) and unnecessary dissipation of your life’s work due to avoidable estate taxes.