Let's face it. It's easy to push-off getting your estate planning done. Most people prefer not to dwell on their death and having to address your demise is typically not an enjoyable experience.
The price for pushing this off until it's too late can be high—both for your mental well-being and to your wallet (or your children's wallets). Here are a few reasons (certainly among others) to speak with an estate planning attorney now to get the process started and finished.
- Tax Savings Opportunities. Under current law, if you die in Massachusetts and your assets and lifetime gifts exceed $1,000,000, your heirs may be responsible for paying estate tax to the state. Although Massachusetts has one of the lowest thresholds for when estate tax is owed, with proactive and proper gift planning, the tax hit can be greatly reduced. An estate planning attorney can help you choose which assets are ideal for gifting, when the gifts should be made and give you a sense of how much money your heirs will save.
- Incapacity Concerns of an Aging Parent. At some point most of us are unable to handle our day-to-day finances. It's important that you designate an individual to make financial decisions on your behalf if you become unable to make them on your own. This document is called a "Power of Attorney." Without this document in place, the decision of who will make financial decisions on your behalf might be left to a court who potentially then oversees any transactions that take place. By executing a Power of Attorney, you remain in control of who handles your financial affairs, and you can avoid the expense and hassle of a court proceeding. There's also an equivalent for medical decision making, called a health care proxy.
- Asset Re-Titling. If you die with an asset (perhaps your home, a brokerage account, bank account, etc.) in your individual name, your family will likely need to "probate" this property. Probate is the process where the court appoints an individual (generally of your choosing as you designate in your will) to oversee the distribution of your assets. This process can take time and be costly (and be frustrating at times!). While you are living, you can work with an estate planning attorney to re-title your assets so that on your death, the speed with which your loved ones have access to your accounts is much quicker and less expensive as compared to navigating the probate process.
- Help Ensure Family Harmony. Leaving your family with a clear understanding of how you want your assets distributed can help to ensure family harmony after your death. Consider a mother who loans money to a son in need while mom is living. Does mom want to forgive these loans on her death? How are the loans being documented? Do the other kids know about the loans? An estate planning attorney can guide you through these issues and help craft a plan that your family will understand and appreciate.