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What would you do if you had been the 30.5 million dollar lottery winner?

October 15, 2012  |  By Elyse DeGroot, Director of Community Relations and Marketing, Duffy Health Center

Celebrate National Estate Planning Awareness Week and learn more about your options.

Along with National Nursing Day, Breast Cancer Awareness Month and Chocolate lover’s day there is National Estate Planning Awareness week. Who Knew? But doesn’t it make sense? As major amounts of wealth are transferred by the Baby Boomer generation, non profits have an obligation to help educate their donors about possible options. Below are a few common questions and answers as well as an estate planning check list. And if reading this inspires you to consider making a bequest to Duffy, please call Elyse DeGroot at 508-771-7517 ext 104!

  • The majority of Americans over 65 are totally dependent on their Social Security checks. With proper knowledge and planning, future generations can have a more secure retirement.
  • It is estimated that over 120,000,000 Americans do not have an up-to-date estate plan to protect themselves and their families, making estate planning one of the most overlooked areas of personal financial management. With advance planning, issues such as guardianship of children, managing bill paying and assets in the event of sickness or disability, care of a special needs child, long-term care needs, and distribution of retirement assets can all be handled with sensitivity and care, a reasonable cost.
  • The majority of Americans lack the ability to adequately plan for their retirement. This can be changed immediately with knowledge and the right planning tools.
  • Many people mistakenly believe that since they aren’t “rich” they do not need to do any financial and estate planning.  Estate planning is not just for the wealthy and is important for everyone. This attitude can be financially harmful in the long-run and can be avoided with proactive action.

Checklist: Six Steps Toward Successful Estate Planning 

1. DEFINE YOUR GOALS: What do you want to happen to your assets in the event of your death or disability? If your beneficiaries predecease you, who are your alternate selections? How will your assets be distributed, and when will these distributions take place?

  • Decisions on distribution of your estate assets should take into account the size of the estate, the ages and abilities of your children, and your personal desires. For example, a distribution to children over time might consist of 10 percent of the estate at age 18, 25 percent at age 21, 50 percent at age 24 or upon completion of college, and the balance at age 30.
  • Choose your appointees for important roles: Who will be your executor and, if applicable, trustee and/or guardians? It is advisable to list at least a first and second alternate for each appointment in case your first choice is unwilling or unable to serve.
  • If you have children who are minors, the appointment of a guardian is probably the most important decision you'll make. With the court's approval, this person, or persons, will raise your children. Consider appointing a family member and spouse, or another close couple who'll care for your children the way you would want.
  • Living trusts have become popular because less administration is required in comparison with a will. Be aware that having a living trust does not eliminate the need for a will and administration at either the first or second spouse's death.
  • To get the benefits of the trust, certain details must be attended to, and this is the job of your appointees. For example, leaving a trust for the surviving spouse requires that the trust be funded properly and in a timely manner at the first death, or major tax benefits can be lost.

2. GATHER & ORGANIZE YOUR DATA: There are three basic tasks to be accomplished:

  • Review and update your financial position.
  • Review how you hold title to your assets. Is it consistent with your estate plan?
  • Review your beneficiary selections. Are they aligned with your estate plans?
  • Did you know that how you hold title to assets has a higher legal priority than your will? For example, if you and your best friend held title to an investment club account as joint tenants and you died, the property would revert to your friend even though you had willed your interest to your spouse.

3. ANALYZE YOUR SITUATION: Start by determining your current net worth, assuming your death occurred today. This can be done by totaling your current assets and liabilities, and adding the value of any life insurance.

  • Try sketching a picture or flow chart of your existing estate plan. Review your appointees:
  • Executor
  • Guardian of the Person/of the Property
  • Trustee
  • Power of Attorney - Property Management
  • Advanced Health-Care Directive or Health-Care Power of Attorney

4. DEVELOP YOUR STRATEGIES: With the assistance of your estate planning advisor(s), identify the legal documents that need drafting or make any necessary adjustments to existing documents. Determine any other actions that must be taken for your wishes to be carried out.

5. IMPLEMENT YOUR PLAN: Do what needs to be done – i.e., create new wills, trusts and powers of attorney, adjust title to your properties, change alternate beneficiaries of retirement plans and life insurance policies to trusts.

6. TRACK & MONITOR YOUR PROGRESS: Check your estate plan annually or any time there are changes in your family situation or net worth. Use your financial planning calendar to schedule your next review.