One Excellent Way You Could Celebrate the Holidays Is Estate Planning

Now is the time to create your estate planning list and double-check it. ” He is compiling a list. He is verifying it two times. He is going to learn who is good and bad. Sometimes the process of estate planning seems like Santa’s. You choose which of the wonderful people on your list should get your money and property as well as who should not (the nasty ones).

This holiday season, getting together with friends and relatives can be a great reminder for you to make sure the correct people are included into your estate plan.

Examining the Past and Honing the Future

This time of year, your plate is quite full. Often not enough time exists between creating lists, buying, decorating, cooking, hosting, and year-end work to savor the essence of the season.

Still, the moment will arrive when everyone assembles. Once the holiday frenzy subsides, you can greet the love of your life and pause to consider family, friends, and your legacy. As you shut the book on 2024 and flip the page to 2025, these little events can help you consider the wider picture. Let not old friends or relatives be lost. Pour your estate plan into a glass to them.

Reviewing Your Estate Plan Twice

Whether you have an existing estate plan or must create one, a few fundamental plan elements—the who, what, and when of estate planning—should direct your decisions.

Your intended beneficiaries are who?

Santa is in charge of bestowing presents upon every person living on Earth. You have not nearly as difficult a job. Still, selecting estate plan beneficiaries is not always simple.

Usually the most obvious recipients are family members, particularly in a marriage with children. Actually, depending on where you reside, you might not be able to disinherit your minor children or spouse even if you wish to, save in some very specific situations. Outside of these rules, though, you are usually free to name whomever you like as beneficiaries. They do not have to be descendants as defined in state inheritance rules—that is, family members to whom the court defaults when someone dies without an estate plan in place.

Your beneficiaries need not be friends, relatives, or even humans. Beneficiaries may be a local business, your alma mater, a charity, or some other kind of entity. Your plan can also call for a trust benefiting an individual, a company, or your cherished pet. Many estate plans combine several beneficiary styles.

Once you create your beneficiary list and verify it twice—including specifying contingent or backup beneficiaries—we may counsel you on tools including a will, a trust, or lifelong gifts you can use to ensure that your selected recipients receive their inheritance in the way you wish.

Should your beneficiaries be given what?

Main factors influencing the kinds and values of your money and property each beneficiary should get usually relate to your own and the particular needs of each recipient. But the “what” of estate planning can sometimes be somewhat challenging, much as the “who.” It goes beyond simply who has been good and bad.

If you diligently even out how much everyone gets for Christmas down to the precise dollar number, you can choose to distribute your money and assets equally. Alternatively you can realize that your struggling artist kid’s requirements differ from those of your son who makes six figures, implying a fair division.

First, compile all you own in inventory. Some clear major ticket items include your house, automobile, and retirement account. Though they are more often forgotten, other things include digital assets, emotive objects, and heirlooms are nonetheless often quite valuable to your loved ones.

List possible family tensions and how gifts could aggravate them. Some accounts or assets—such as financial ones, a family vacation house, and life insurance—can be divided among loved ones. Tangible personal property—dishes, picture albums, artwork, etc.—may not be split easily. Some of these things, though, are sellable and the money split.

Remember that shared ownership concerns sometimes make dividing accounts or property to equalize inheritances more difficult than it solves. Leaving the family cottage to several children, for instance, can cause arguments over occupancy rights, maintenance and upkeep, and timing of sale.

When should your beneficiaries get their inheritance?

One might create gifts either throughout your lifetime or following death. The technique used determines some of the timing of those contributions.

Increasing numbers of people nowadays are adopting a “giving while living” approach. Making gifts while still living allows you to observe your loved ones savoring their inheritance. This approach can also benefit from current gift tax exclusions. Sometimes, though, passing the same accounts or assets through an estate plan upon death could provide a larger tax advantage.

A will and a living trust are the two primary instruments available in estate planning for passing assets to loved ones upon death. Generally speaking, using a trust helps one achieve a faster distribution. While accounts and property donated by a will must first pass through the court-supervised probate procedure, which can delay distributions, accounts and property owned by a trust are not subject to probate court supervision. Additionally avoiding the probate process by using beneficiary designation papers for accounts and policies that have them available (e.g., retirement accounts, life insurance, and bank accounts) would help to timely dispense the cash. These probate avoidance strategies, however, produce a lump-sum payment to your loved one that could not fit your intentions and wishes.

Trusts permit more subtlety in the distribution of property and accounts. Gifts, for instance, can be spread over time as a child grows and gains increasing ability to manage an inheritance or as life events like graduation or work are reached. Additionally under complete discretion, a trustee can decide when to present gifts or dividends to the beneficiary.

Ultimately leaving more behind for your loved ones, an attorney can assist you in finding the ideal mix between living for the time and postponing gifts till after death for tax and planning considerations.

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Offer a gift of an estate plan.

One great gift you might present to your loved ones as well as yourself is an estate plan.

Your estate could wind up as chaotic as a white elephant gift exchange, with loved ones fighting over who should get what and state law—not your final wishes—having the last word without a thorough up-to-date plan identifying what you own, who your beneficiaries are, and how you wish your accounts and property distributed at your death.

The holidays come and go. Your legacy shouldn’t be that of See our attorneys to discuss creating a plan fit for year-round celebration when the holidays wind down and your usual routine resumes. Call to arrange a time when we may implement your list.