Certain times of the year just seem to inspire change. For some people, springtime is the time for renewal. For others, it is the back to school season. For most people, no time to satisfy her revealed quite like the beginning of a new year.
For many people, a New Year means New Year’s resolutions. The chances are that you have made resolutions yourself. Maybe you have resolved to do things like lose weight, exercise more, finish that novel or get that promotion. Most New Year’s resolutions have one thing in common; however positive and well intentioned they may be, most people will regrettably fail at their New Year’s resolutions. Many people make impractical resolutions, knowing that they are unlikely to keep them.
Why not try something different this year? Instead of making tenuous resolutions, consider making concrete plans. As we start the New Year, the time is right to take the time to review and update wills & medical directives to fit your changing circumstances.
The Problem with Final Plans
Most people are uncomfortable making estate planning decisions. This explains why 64% of Americans do not have a will at all.[i] There are many reasons for this: some people feel like they do not have the time for estate planning while others feel that they do not have enough assets to bother. The fear of death may be a factor as well; most people do not want to face their own mortality. The simple truth is that Every one of us will eventually die; this is an undeniable fact. However, this fact should not inspire fear; it should motivate us to prepare for the inevitable. Taking the time to update wills & medical directives is the best way to make sure that your loved ones are prepared for your death.
When To Update Your Estate Planning
Even if you do have a will, if you have not updated it in a while, it could no longer match your current desires and circumstances. There are a number of events that could impact your estate planning:
Changing Living Situations
Perhaps you have moved from one home to another or your children have moved out leaving you with an empty nest. If you have gone through a divorce or separation, changing your estate planning is even more crucial.
When you change jobs, it can impact your health or life insurance; you should update your estate plans accordingly.
If you have more children or grandchildren than you once did, your will may need to change. Many people assume that their families will distribute their assets fairly when they are gone, but in reality, far too many families end up fighting over assets when a loved one dies. Do not assume that your family will know your wishes once you are gone.
Our country is undergoing a transition of leadership. The new presidential administration promises to make sweeping changes in many areas. The laws governing estate planning in your state may have changed recently and may change again.
These and many similar circumstances can combine to make your current will unclear or even invalid. If you die without an updated will in place, your family could be left waiting for a judge to decide how to divide your estate. There is no reason to put your family through this additional stress; having an updated, accurate will that fits your desires and circumstances is an essential element of your overall financial planning.
The Big Three
There are three important documents that will help your family understand your wishes if you are killed or incapacitated. These three documents are your Will, your Medical Directive and your Financial Plan.
The purpose of your will is to state what you intend to have been with your property and your minor children once you are gone. This document should include details about who gets your property. If you have minor children, your will should specify who is to care for them. If you die without these instructions in place, your minor children could be placed in the foster care system until a judge can review your situation.
Making a will does not have to be difficult, and in most cases, you can complete the task without getting an attorney involved. A very simple document outlining your wishes will be sufficient, once you have it signed by a Notary Public.
Your Medical Directive
If you are incapacitated, what medical care do you want to receive? Who can make medical decisions on your behalf? Your medical directive is the place to make these wishes clear. When a loved one is incapacitated, the stress on a family can be incredible. Your medical directive can be as simple or as complex as you like. You can simply specify who can make decisions for you or you can describe in detail what you would like to happen in different scenarios. In any event, making your wishes clear to everyone ahead of time is the best way to help your family through this difficult time. You should keep in advance article directive on file with your doctor’s offices, and keep a copy with your important papers.
Do you own investments and other assets? Your financial plan should list all of your assets, whether you wish for your family to control them or not. In either case, your family needs to know. Your debts are important as well. Once you are gone, unscrupulous creditors could victimize your family; including records of your dad in your financial plan let your family know exactly what you owe. Far too many families end up in conflict over their loved ones assets; take steps to avoid this unfortunate situation.
Your will, your medical directive and your financial plan are the three documents you need to ensure that your property, your assets and your family is properly cared for once you’re done.
Few people are comfortable facing their own mortality. Most of us take great care to avoid thinking about. Some of us even feel like planning for death is almost like asking for trouble. Sadly, everyone will die eventually, whether they are prepared for it or not.
Making final plans is not comfortable for anyone, but it is a necessary task. If you do not have a will when you die, the odds are high that your state court system will step in and make decisions regarding your assets and your children. If you are incapacitated because of an accident or a disability, your medical directive lets your family and medical staff know what your wishes are, and who can make decisions on your behalf. Your financial plan with all of your assets and debts, giving your family the information they need to pick up the pieces once you’re gone. In every case, the benefits of making final plans far outweigh the difficulties.
Rather than making resolutions you probably will never keep, this year, why not make plans?
Things To Consider For The New Year: Updating Wills, Medical Directives & Financial Planning