Friday, January 27, 2017 | 10:03 am
The proper estate planning is necessary for everyone. But as we age, our situations change, our priorities shift, and estate planning may become a more important consideration. At a minimum, if you own real property in California or if you have cash assets over $150,000 you must have a trust to avoid burdening your beneficiaries with an expensive and time-consuming probate upon your death. Even if you have an existing Estate Plan reevaluate every 5-10 years to make sure it still reflects your wishes.
Here are some thoughts to guide you as you revisit that plan in your 50s, 60s, 70s and 80s:
During our fifties many of us find ourselves caring for both our parents and our children—we’re the so-called “the sandwich generation.” This means you should be concerned about your children’s and parents’ planning as well.
● Help your adult children create a plan. If your children are 18 years and older, encourage them to create an estate plan of their own. Everyone over the age of 18 must have a Durable Power of Attorney for Financial Matters and an Advance Health Care Directive as parents are not automatically authorized to make medical decisions on their children’s behalf.
● Ensure your aging parents have their estate plan in order.
As your parents age they may begin to need assistance with financial affairs or care and some advance planning now can avoid a crisis down the line. Here are some areas to think about are:
- Estate planning—If your parents own real property or have cash assets over $150,000 they should have a Revocable Living Trust to avoid probate when the second of them passes away.
- Incapacity documents—every person, regardless of assets owned, must have a Durable Power of Attorney for Financial Matters and an Advance Health Care Directive which are crucial to allow a trusted person to make financial and health care decisions for them if they are incapacitated.
- Long-Term Care—What is the plan if one or both of your parents need long-term care? It is never too soon to start thinking about how to pay for long-term care.
● Take note of digital assets, passwords and important documents.
Now is the time to amend your documents to reflect the current state of the law and your family. For example:
● Provide protection for your adult children
Revisit or create a plan that provides for the unique circumstances of your adult children. The proper trust vehicle can protect your children’s inheritance from divorcing spouses or other creditors. Also, trusts can give you peace of mind if you have a child who is irresponsible with money or has an addiction problem by appointing a neutral third party to manage your child’s inheritance.
● Are you recently divorced? Have you remarried?
Estate planning and family law intersect in very specific ways. If you have gotten divorced, you want your estate planning documents to reflect your new situation. Perhaps you would like to provide for your new spouse, but you also would like to protect your estate for your children.
● Add grandchildren to your legacy.
An effective trust can pay for the grandchild’s necessities while protecting the principal until the grandchild is mature enough to handle it.
● Have you received an inheritance?
Make provisions in your estate planning to ensure it is protected and distributed according to your wishes.
As you approach your 70s, you will want to take stock of your assets and make sure you are still on track with your estate plan:
● Review beneficiaries.
Review beneficiary designations on your tax-deferred accounts and insurance policies to make sure they are still in line with your desired distributions.
● Are you a widow/widower?
Notify the institutions where you have accounts, and collect life insurance policies. Visit your attorney to update estate planning documents and change title on property.
● Notify your family.
Let your family know what planning you have done and where they can find it. Provide contact information for your advisors to your family or beneficiaries.
● Revisit your advanced directive and make sure it still reflects your wishes.
Speak candidly with your health care agent about your feelings and your values so that he or she can make the best decisions about your care at the end of your life.
● Think about your final wishes and memorial service and communicate that with your agent.
At 80, you are likely reflecting on your life and your legacy.
● Ask for help with finances.
Appoint someone you trust to act jointly with you, before it is too late. Consult with an attorney to prepare documents that will protect your interests and also prevent court-intervention into your life.
● Consider charitable giving. After your death, you can continue to support the charities that are important to you. Your charitable legacy is a wonderful way to be remembered after you are gone.
Ali Smyser is an Estate Planning Attorney at the Law Offices of Donald P. Schweitzer in Pasadena, Calif., who handles all areas of including trusts, wills, probates, general and limited conservatorships, and special needs trusts. Her areas of expertise include estate plans for mature adults, as well as families with blended families or special needs. She is a member of the California State Bar, the Los Angeles County Bar and the Pasadena Bar Association. She is active with numerous community organizations.