Changes In Life = Changes To Your Life Plan

When I got out of law school in 1997, some classmates were talking about opening up their own offices. I thought, no way, that isn’t for me! I want to get a paycheck, save for retirement and make partner someday. I also had no plans for having a child either. Fast forward to 2005 – I had my infant son and had just left my job because I wanted to stay home with him. If you know me, you knew that wasn’t going to last for long. So after just a couple months of being a stay-at-home mom, I decided to “hang up my own shingle” and became a business owner. At first, it was part-time, but when my son started school full-time, I did, too. Now, he’s 15 and doesn’t need me the same way, and my husband is looking at retirement in a couple years, so once again, I see my business and practice change. I do more volunteer work, I’m out networking more often and the areas of my practice have been refined. All of these events were life changes. So in continuing our series on estate planning, this month we look at some of the milestone times in your life when you need to review your estate and financial plans. I am going to ask you some uncomfortable questions to start the dialogue. Graduating from School – Landing your first big job… When you were in college, you still looked to your parents – you were on their health insurance, you probably still lived at home. But now, you have your first big job with a 401(k) retirement plan, making decent money (hopefully!) You think – heck, I don’t own anything but a car and some cash in the bank, I don’t need a will. But, ask yourself… 1. If something happened to you and you were in the hospital, would your parents or partner be able to access your bank account to pay your bills? 2. Who do you want to manage your affairs if you can’t? Take 15 minutes out of your day and give me a call. I can craft a power of attorney, health care proxy and living will that can alleviate any extra stress if something unthinkable happens. After you get married and have children… Before you got married, you probably had your parents as beneficiaries on your life insurance. But now, you have your own core family. Or maybe you are married for a second time. Some questions to ask think about: 1. Do you have life insurance? Did you and your spouse list one another as beneficiaries? Make sure you change that every place you need to – through your work or other policies. You can also allocate percentages, so for instance, 50% to your spouse and 50% to your parents, etc. 2. Is your spouse in your will? And if you don’t have one, this is a great time to get wills together (often called a reciprocal will, e.g. I die, you get all mine, you die, I get all yours) or perhaps is your prior spouse still your beneficiary or in your will? 3. If you have children, have you picked a guardian if something would happen to either of you? If the kids are young, do you want them to have access to your assets right away, or do you want them in a trust until they are 25 years old? Do you have directives in place for health care? Do you know your spouse’s wishes? These aren’t easy conversations, but they are necessary. Just like the gecko says he can save you money on car insurance in 15 minutes, I can help you protect your assets and your family in the same amount of time. Let’s look at some other life events… After you buy a house… 1. Are both you and your spouse on the deed? If not, we can assist with a deed transfer to put you both on the deed. 2. If you aren’t married yet and you bought a house with your significant other, do you have a plan for what will happen to the house after you have passed? Will it go to your adult children? Have you discussed this with them? 3. If you don’t have children, who will it go to? Have you outlined all of this? If your child has special needs… Do you need to set up a trust for your child? If you were to pass away unexpectedly and no trust was in place, could their future guardian incur the medical expenses of raising them? Make sure your child and their caretakers have everything in place you can do in advance for them. College planning for your child… 1. Do you want to set up a trust for your children to help pay for college? You can set up a 2503(c) minor’s trust and the money will be given to your child when they reach the age of 21. 2. You can also set up a 529 savings plan. This money is not taxed, whereas money in a trust is taxed. Although there are pros and cons to both of these, so review what works best for your family. After you start a business… Is it a family business? Have you outlined how assets will be allocated or who will take over if you no longer can play an active role? Elderly parents… Have your parents put everything in place to protect their assets? Is their home in a trust?  Remember, Medicaid has a 5-year lookback period so it is best to plan early. It is important to revisit your estate planning documents whenever you have a major life change. Make sure all the big changes in your life are protected and everything is up to date. Protect your legacy. We can help you do that. I would be happy to give you a free review of your current estate plan and offer suggestions, if there are any, to help you protect yourself better. Next month, we are going to review some of the different types of trusts out there and which ones might be good to add to your estate planning. F