Myth 1: I already have a will, so I do not need to worry about my estate plan ever again.

Depending on how long it has been since you had your will prepared, it may be time to review your will and its provisions. There are many life events that might result in your current will being misaligned with your ultimate goals. Do you have new loved ones in your life that you would like to include in your estate plan, possibly due to a birth, adoption, or marriage? Has a beneficiary passed away and you have decided on a new person to receive your money and property?

In addition to ensuring that the loved ones you want to provide for are included in your will, have you changed your mind about how they should receive their inheritance? Over time, you may have accumulated more wealth, or your beneficiaries may now be in a position where their inheritance needs more protection. With more money and more protection needed, it may now be time to create a revocable living trust to determine how your money and property are managed. An added bonus is that a revocable living trust allows your wishes to be carried out without court involvement, whereas a will must be administered in probate court. Avoiding probate can also save a substantial amount of money depending on your state's probate process.

Myth 2: A revocable living trust can take care of all of my needs.

A revocable living trust is a great way to manage your money and property without court involvement when you are unable to manage your affairs or you pass away. However, this tool alone may not be enough to support and protect you. First, you need a financial power of attorney if there are accounts or property that are not owned by your trust. Some accounts, like a retirement account, cannot be owned by a trust—the trust can only be named as the beneficiary of the retirement account. Therefore, a financial power of attorney will allow you to name someone to manage accounts and property, such as your retirement account, on your behalf if you are unable to manage your own affairs during your lifetime. A power of attorney is also especially helpful if someone needs to contact your human resources department, access your mail, or manage your digital assets.

Another tool you should have is a medical power of attorney. This document allows you to name a trusted individual to make or communicate medical decisions on your behalf if you cannot communicate them yourself. This authority can be given only in this document—it cannot be given in a revocable living trust. You should also consider a living will, which may be referred to in some jurisdictions as an advance directive (if your state allows for them). This tool enables you to explain your wishes for your end-of-life care. Lastly, you should consider executing a HIPAA authorization form so that your trusted decision-makers and loved ones can gain access to your protected healthcare information.

Finally, if you have a minor child, you should have a tool that nominates a guardian of that child. One option is to nominate the guardian in your last will and testament. In most states, a standalone document can also be used for the nomination. Both of these tools act merely as a nomination—a judge will still have the final say—but they allow you to have a voice in the decision-making process. An additional benefit of having a separate guardian nomination tool is that it can be used not just at your death but also if you become unable to manage your own affairs.

Another tool that could be useful if you have minor children is a delegation of parental powers. If this type of tool is recognized in your state, it will allow you to name individuals who can temporarily act on your child's behalf in the event of an emergency. You may use this tool in many different situations, such as if you are traveling without your child or if you are otherwise unable to get to your child immediately in the event of an emergency. This tool helps ensure that your child receives the care you want them to receive as soon as possible, regardless of your personal circumstances. An additional benefit of these separate nominations is that they can often be updated with less difficulty than a will or trust if your preferences for the guardian of your children change as they age.

Question 1: What are things that could impact my estate plan?

There are many different things that can impact your estate plan:

●     Birth or death of a loved one or trusted decision-maker

●     Marriage or divorce (yours or a loved one's)

●     Moving to a new state

●     Receiving a large inheritance

●     Getting a promotion at work

●     Dramatic increase in the value of your retirement account

●     Owning more now than when your estate plan was first created and fearing that you could be close to the current lifetime estate and gift tax exemption amount

Question 2: How often should I review my estate plan?

We advise that you dig out your estate planning documents and review the basic details (whom you have chosen as your trusted decision-makers, whom you have chosen as your beneficiaries, how much you have chosen to give your beneficiaries, and how they will receive their inheritance) every one to three years. During your personal review, if you have questions or believe that you may need to change your documents, please give us a call so we can ensure that any changes are properly reflected in your estate planning tools. 

CONTACT THE D'ORLANDO FIRM, PLLC TODAY

Have questions or need help?  At The D'Orlando Firm, PLLC, we can help. Contact us today either online or at (267) 392-5428 to schedule a free consultation.

Disclaimer: This blog post is for informational purposes only and should not be construed as legal advice. Always consult with a licensed attorney for legal advice.