Sooner or later in life, we have to take the ultimate actions of adulting: making plans for our later years, which include provisions for our caregiving needs in the event of decline, and the gifting of assets to others upon our death. While we would all love to indefinitely put off these decisions, doing so makes things worse, not better, for everyone involved. The best advice? Get the conversations going.
More Than Money…
Let’s face it: money does matter, and the privilege of having more than is needed in a lifetime comes with the responsibility of designating assets for loved ones and charities. Nonetheless, as important as making arrangements for assets is, doing so is not the only reason for estate planning, as attorneys at Frank & Kraft explain: “Estate planning is about more than just deciding how to distribute your assets. It is an opportunity to engage in meaningful discussions with your loved ones about your legacy, values, and long-term wishes. By having these conversations, you can help prevent conflicts, strengthen family bonds, and ensure your intentions are honored.” Here are two specific tips Frank & Kraft offer related to preserving family history and heirlooms:
- Our estate plan provides an opportunity to pass down more than just material wealth. When properly drafted, an estate plan can also be a way to preserve your family’s history. Sharing your ancestry and personal stories with loved ones ensures that traditions, values, and key moments are remembered….If you have compiled genealogy research, old photographs, or historical documents, consider including instructions in your estate plan regarding their preservation and distribution.
- Unlike financial assets, which can be divided relatively easily, heirlooms carry sentimental value and are often irreplaceable. Items such as jewelry, artwork, antiques, and family keepsakes hold deep emotional meaning….Talk with your family about which items matter most to them. Having these discussions can help prevent disputes and ensure treasured possessions are passed down in a way that aligns with your wishes. To avoid confusion, you might document these decisions in a separate memorandum attached to your Will or Trust….
When it comes to planning for assets, don’t be so eager to earmark funds for the next generation that you neglect your own care needs: the trend toward longer lives increases the likelihood that help will be needed down the line. Designating money, and having a care plan in the event of a capacity decline, is likely the greatest gift you can ultimately give the upcoming generations of your family. A solid estate plan includes designating a financial power of attorney and someone you can rely on for decisions about your healthcare needs – aka a health proxy. These individuals, unlike the fiduciary designated to handle your affairs upon your death, are empowered to act on your behalf during your lifetime should doing so become necessary for your well-being.
With a plan in place for yourself, estate planning can move on to arrangements, via a will or trust, to designate assets for a loved one, charities, and even pets. Keep in mind that there is no rule dictating that parents must leave anything to their children, and certainly no rule that says inheritances must be equal. Sometimes, one child may be doing quite well financially, while another has opted for a less lucrative career path, or is facing special challenges. It is OK to gift assets accordingly, but effective communication is a must, as is periodically reviewing and updating your plan:
Without previously experiencing any significant conflicts, even close siblings can struggle to maintain happy family relationships when settling your estate … Speaking to your children directly is the easiest way to avoid a fight. Manage their expectations about your estate plan and listen to their input. Unless you ask, you cannot know for sure what they might want to hold onto once you’re gone. These family discussions need to include all heirs because if one heir gets a say about what they inherit, so should all….When you begin shaping your estate plan, you may consider a strategy that focuses on splitting up your assets equally. Then, as time passes…,you can…make adjustments as often as you like. There may even be a way to address specific financial scenarios and concerns in your estate planning documents that would trigger leaving more to one child than another, but only should something particular or unexpected happen.
Good To Know: Estate Bonds
When an estate plan is made, a trusted fiduciary is appointed to administer it. Depending on location and circumstance, this person may be specifically referred to as an executor, personal representative, or trustee. Because of the responsibilities involved in the role, an estate bond is frequently required. The purpose of an estate bond is to guarantee that debts and assets will be properly handled in accordance with the estate plan and the law.
An estate bond is sometimes alternatively named based on the specific role of the fiduciary. For example, an estate bond may be referred to as a trustee, executor, personal representative, guardianship or conservator bond. Colonial Surety Company makes it quick and easy to obtain estate bonds of all kinds. A user-friendly online service allows you to quote and obtain a bond that is instantly available to download or e-file. Fiduciaries in every state can efficiently obtain their estate bonds here:
Estate planning attorneys can help clients secure court and fiduciary bonds with a few clicks on The Partnership Account® for Attorneys. Just select the bond needed, send it to your client for payment, and then download, e-file or print the bond. Our fiduciary bonds include: administrator, estate, executor, guardian, personal representative, probate, surrogate, trustee, conservator and the list goes on. Court bonds include: appeal, supersedeas, injunctions, replevin, receiver and more.
Colonial Surety is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed, and licensed for business everywhere in the USA. Our customers have awarded us a 4.8 Trustpilot score. Whenever and wherever you need a bond, trust Colonial: www.colonialsurety.com