Top 10 Tips for Estate Planning in Washington DC
About half of the people in America choose not to have any estate planning documents. If they become incapacitated, they will be at the mercy of other people who will make their choices for them. This guide provides some simple tips to planning your estate and avoiding unwanted consequences.
Make a will.Even a simple will is better than no will. Make a separate list of tangible personal property such as china, heirlooms, and jewelry, and reference the list in your will. Put the date on the list in case your loved ones locate more than one list. Using the list technique allows you to make changes and add later-acquired items without having the expense of making a new will. Do not keep your will in a safe deposit box. Put it where your loved ones can find it readily.
If you want to disinherit someone the state would presume would inherit from you, come right out and say so in your will. You do not have to give a reason, but you should make it clear that you made an intentional decision to disinherit, as opposed to an oversight, to avoid a will contest. You can handle this situation by listing all your children, then stating that you are intentionally not leaving [adult child's name] anything from your estate.
Obtain term life insurance.A term policy is an affordable way to pay off debts, replace your income for a number of years, and leave money for your children to get through school.
Put a durable financial power of attorney in place.If you are incapable of handling your financial affairs due to an injury, illness, or medical condition at some point down the road, the person you select in your durable financial power of attorney can take care of matters for you. Without this document, your family would have to go to court, have a judge declare you incompetent, and appoint a guardian for you.
Put a durable healthcare power of attorney in place.Just as a durable financial power of attorney empowers the person you choose to handle your financial affairs when you cannot, a durable healthcare power of attorney allows someone you select to make your medical decisions when you cannot make or communicate those choices. You should also sign a HIPAA release to authorize your healthcare provider to speak with the person or persons you designate.
Minimize what has to go through probate.Try to load the bulk of your assets into financial vehicles that do not go through probate. Examples of these assets are:
o term life insurance proceeds (unless you make your estate the beneficiary),
o retirement accounts,
o jointly-owned property with rights of survivorship,
o TOD (transfer on death) accounts,
o POD (payable on death) accounts, and
o joint accounts.
The more that passes outside of probate, the more likely you are to reduce your estate to the point at which it qualifies for simple probate or small estate probate, which can be quick and easy.
Create a Revocable Living Trust.This estate planning document allows you an extraordinary amount of flexibility in how your trustee will one day distribute your assets.
Draft an end-of-life directive.A person is seldom more vulnerable than when leaving this life. If you want to make sure this phase of your life goes as you want it to, you should sign an end-of-life directive that specifies your wishes, including hospice.
Initiate directive for organ donation.Do not rely on your driver's license to identify you as an organ donor. A directive for organ donation allows you to determine what happens to your organs.
Make your memorial plans and arrangements.Keep the details readily accessible, not in a safe deposit box. It can take a court order to open the box, by which time you would probably already be laid to rest, and not necessarily the way you wanted it to be. Pre-paid funeral and burial plans have fallen into disfavor. Too many companies have gone out of business but kept the money paid to them. Make a budget and set aside the funds or designate a portion of your life insurance proceeds for your funeral and burial. Decide if you want burial or cremation. There can be a vast difference in cost. Make sure that the company you select for your cremation will not charge your estate or family for a coffin if you are going to have a cremation. Some unscrupulous cremation firms use this tactic to jack up their bill.
Revisit Your Papers and Plans10. Update your documents whenever there is a significant event in your life, for instance, if you get married or divorced or give birth to or adopt a child. Even if you have had no recent relevant life events, read over your documents at least once every three or four years. You might want to make some changes. If you read over your papers on every Leap Year Day, your review process will be on auto-pilot.