When was the last time you looked at your estate plan? Was it just after getting married? Perhaps you updated a few things when your children were born? Maybe you have yet to put together an estate plan.
It is never too soon to begin preparing your estate, and the beginning of a new season is an excellent time to review documents and ensure everything is up to date. Estate-related laws change year by year. Make sure your estate plan is robust and up-to-date with these helpful tips:
Obtain and Maintain These Five Documents
There are five critical documents you should have in your estate plan. Having these documents already prepared will prevent conflict among siblings, relatives and beneficiaries, and help to ensure that you are taken care of in the event of an accident or illness.
- Durable Power of Attorney: One person is appointed to step in and make decisions regarding your financial and legal situation, if you fall ill or are incapacitated. While this seems simple, there are many small details to be worked out, such as securing alternates, the ability to gift power of attorney, when the person with power of attorney should step in and whether trust powers should be granted.
- Healthcare Proxy: One person who will make healthcare decisions for you, in the event you are unable to make decisions for yourself. Providing the healthcare proxy with a general directive on your desires (for example, suspending life support in a vegetative state, or doing anything necessary to prolong life) will help the appointee to make the best decisions regarding your care.
- HIPAA Release: A release providing permission to members of the family to see and discuss your medical records. This can be invaluable if you fall ill—and are unable to understand or voice consent—as family can provide important information regarding your health and medical history to medical professionals.
- Revocable Trust: A document that allows a group of people the ability to manage your assets or investments to ensure that the beneficiaries receive their share. It gives children and grandchildren the opportunity to become familiar with their parents’ and grandparents’ financial situations before their passing, and to step in if any issues should arise.
- A Will: A document that spells out who receives what from your physical assets. Writing a will can save enormous amounts of time and conflict in court after your passing. By appointing an executor in your will, you assign someone to take the reins of your estate and help heirs receive what you have gifted.
Know Changes to Estate-Related Laws
As of 2017, there is:
- A $5,490,000 federal estate tax exemption (increased from $5,450,000 in 2016) and a 40% top federal estate tax rate.
- A $5,490,000 GST tax exemption (increased from $5,450,000 in 2016) and a 40% top federal GST tax rate.
- A lifetime gift tax exemption of $5,490,000 (increased from $5,450,000 in 2016) and a 40% top federal gift tax rate.
- An annual gift tax exclusion of $14,000 (no increase from 2016).
Exemption increases facilitate the transfer of larger gifts to inheritors, and help provide income opportunities to inheritors in lower tax brackets without fear of heavy tax burdens.
Do not wait to plan your estate! You do not need to wade through the murky waters of estate-related law alone, as a well-represented estate planner is a successful estate planner. For information on retaining a legal representative, contact the attorneys at Snee, Lutche, Helmlinger, and Spielberger today.