New Year’s Resolutions – To Lose Weight, to Quit Smoking, to Execute an Estate Plan – And Not Necessarily in That Order
January 19, 2017
With the start of a New Year, everyone makes resolutions – to exercise more, to quit smoking, etc. But does anyone resolve to create or update his or her estate plan? This should be top of the list. If death or disability were to occur in 2017, are you prepared? We never know when tragedy will strike. There is no magic age at which we know that death or disability is on the horizon.
No matter your age or your circumstances, an estate plan is a valuable asset. Take Prince for example. Certainly, he did not expect to die at the young age of 57. We were all shocked to hear of his death. And, frankly, more shocked to hear that he did not have a Will. With no apparent heirs (a spouse or children), Prince’s estate will be stuck in litigation for years while family and alleged family fight over his assets. Your life does not have to be as complicated as Prince’s to need a Will.
Everyone, no matter your circumstances, should have a Will (or Revocable Trust). A Will states your funeral wishes, appoints a guardian for minor or disabled children, designates who will be the Executor of your estate, makes specific bequests of tangible personal property, and provides for the distribution of the remainder of your assets. A Will can provide for the use of tax beneficial trusts to help reduce taxes and to protect your beneficiaries. Without a Will to designate who will inherit your estates (or appropriate beneficiary designations), the laws of intestacy of Maryland (or the state of your residence) will control. The common belief that the state will take all of your assets if you do not have a Will is a myth, but the state will certainly decide who will inherit those assets. Most surviving spouses are surprised to learn that Maryland intestacy law does not provide for the spouse as the sole beneficiary. The spouse and children share in the distribution of assets upon death. This can be complicated in a second marriage when there are step-children, or even in a first marriage when the surviving spouse needs the assets for support.
In addition to a Will, everyone should have an Advance Medical Directive and a Durable Power of Attorney for financial matters. These documents appoint someone to act on your behalf in both medical and financial matters if you are unable to act on your own behalf. The Advance Medical Directive also provides your wishes as to life-sustaining medical treatment. We all recall Terri Schiavo who spent 15 years in a vegetative state while her parents and husband fought over her care because she had not executed an end-of-life directive. As with Terri Schiavo, not having an Advance Medical Directive or Power of Attorney may require your family to pursue costly and time-consuming guardianship proceedings.
So, if you heed my advice and succeed at all of your other resolutions, this time next year you will be a more fit, non-smoking person with an estate plan in place that hopefully won’t be implemented for many years to come. In the interim, here is to many happy, healthy years. By the way, once you execute an estate plan, don’t just forget about it – you should update it when your life circumstances change or as necessary to keep up with changes in the law.
Looking for guidance on an estate plan? Reach out to Mary Rose Cook at 410-986-0844 or firstname.lastname@example.org.