Coronavirus and COVID-19 have pushed various topics, that normally are treated as “when I get to it,” to the front of the line. One of those neglected items are personal and business estate plans. Of course, no one wants to talk about dying, and what happens after you die, but the current environment has made those discussions commonplace.
Legendary singer and songwriter Aretha Franklin passed away at the age of 76 in August 2018 in Detroit. It was a very sad day for the music world, but it also brought about an outpouring of reflection on her tremendous work to the cause of civil rights. It was estimated that she left a net worth of about $80 million. Unfortunately, she did not have a will, the cornerstone document in the estate planning process. According to Michigan state law, her assets were to be distributed equally among her four children.
Estate planning is the process of making plans for the transfer of your assets upon death. An estate includes your home, business, investments, cars, cash, jewelry, clothes, et cetera. Basically, anything you own. The estate planning process ensures assets are properly transferred to your heirs, both from a legal standpoint and from the perspective of to whom you want your assets to go. From the financial view, paying as little taxes as legally required and maintaining privacy is important as well. A final purpose of the estate plan for some individuals and couples is the assignment of guardians for children. These are extremely important and emotional decisions.
In this series, we will explore topics related to an area we as human beings don’t like to bring up very often – what happens to our assets when we pass away? Coming to grips with our mortality is difficult, but it is the responsible thing to do in order to make things easier for our loved ones when we are gone. This is an area we specialize in here at TFC, and we want to guide you through this process. The good news is doing it ahead of time, when things are relatively stable, is ideal. The last thing you probably want to do when you or a loved one is battling illness is to draw up your estate plan.
Documents such as a will, trust, health care proxy, and durable power of attorney are some of the key forms we can help you put into place. By having these documents, it will make for a much easier process in the event a significant health event, or accident occurs. In the development of the documents, you will make the decisions around various scenarios, who can make decisions on your behalf, where your assets will go, etc., but we will guide you through the complex legal terms and impacts of each decision from a planning standpoint.
Behaviorally, we all like to put this off to another time. The best thing to do is put a time on your calendar, perhaps at your next one-on-one with TFC, when you will resolve to get the process started. Often just getting the ball rolling is the hardest part to overcome when crafting the estate plan. It is just one of those things humans like to put off for another day, but that is a big risk. We at TFC are in the business of managing risk and behavior, so this is a very important topic.
Here’s the point:
- Estate planning is the process of developing a plan for where assets will go upon one’s death
- To whom your assets go, avoiding excess taxes, naming guardians for minor children and complying with all federal and state laws are some of the aspects of the process
- The legal jargon and paperwork can be complex, but TFC is here to guide you through it all
- Behaviorally, most people do not like to start the process. The biggest hurdle is devoting time to get started. Not having a plan is risky, and we want to help you reduce risk.
Action Items:
- Set up a time with TFC to get started; we believe you will see that the process is not as daunting as it seems, and you will likely feel more confident about your long-term plan once we have an estate plan in place
- Putting an estate plan in place when life is somewhat stable is better than waiting until after an unfortunate health event occurs
- After we enact your estate plan, we will periodically review it to ensure it is still up to date with your wishes
Featured Image: Photo by Jude Beck on Unsplash