An Estate Planning Resolution

January is the month for resolutions.  Many of us will say, “In 2012, I resolve to lose weight, learn a new language and take that ‘once in a lifetime’ vacation.”  On a more mundane note, many of us should resolve to finally put our affairs in order. 

If not the first component, obviously a significant component in putting your affairs in order is having an estate plan in place.  Do you have a Will?   If you do not have a Will, the laws of the Commonwealth of Virginia have written one for you, and the Commonwealth’s default provisions may not be what you want, especially if you are in a non-traditional relationship, have children from prior marriages, have creditor claims, have any charitable intentions, or own a closely held business with other owners.

Do you have a Durable General Power of Attorney or an Advance Medical Directive?  If you do not have a Durable General Power of Attorney, an expensive and time-consuming guardianship proceeding may be in your future.  If you do not have an Advance Medical Directive, the Commonwealth of Virginia, again, has provisions in its laws directing who can make health care decisions on your behalf and what decisions they can make. 

To get your estate plan and related affairs in order, you may want to consider the following actions:

1.                  Pull all of your personal and financial information together and carefully review it with your spouse or significant other.  Is the paperwork current and in order?  Are all of your beneficiary designations up to date?  Are your assets titled as you wish (individually, joint or in trust)?  Are the original documents and copies of important documents readily available to you and to the persons who will need to use them?

2.                  While it may rival the preparation of your income tax return for excitement, review all of your insurance coverages.  Is your insurance up to date and in the right dollar amounts?  Take care to review life insurance, disability insurance, long-term care insurance, property and casualty insurance, and any other insurance policies you may find. 

3.                  Check to see if you have Durable General Power of Attorney.  If yes, is that document up to date, including naming the appropriate agents to act on your behalf? 

4.                  Check to see if you have an Advance Medical Directive.  Is that document up to date, including having the appropriate individuals named your agents? 

5.                  Review your Will.  Do you have one or more Trust Agreements?  Have those documents been reviewed recently in light of changes in the Federal Estate and Gift Tax Laws?  Do your Will and Trust Agreements carry out your intentions?  Are the beneficiaries up to date, are the ages at which beneficiaries receive assets appropriate, and are your agents (trustees and executors) the persons whom you currently trust to carry out your intentions?

6.                  Analyze your current income and assets.  If you become disabled, how will your family meet its financial needs?  If your spouse become disabled today, will you be able to provide for yourself?  If you die or your spouse dies, will there be income and/or sufficient assets to meet the needs of the survivors?  

7.                  Write a letter of instruction to those who will handle your affairs in the event of your death or disability that expresses thoughts you would not want to set out in your Will or Trust Agreement.  A letter of instruction may include special notes to family members, thoughts about funeral arrangements, or confidential information about certain assets. 

8.                  Pull together a list of all of your advisors, including your family physician, attorney, accountant, financial advisor and insurance agent.  Check their contact information to be sure you have the most up to date addresses, phone numbers and e-mail addresses.

9.                  Follow through, as necessary, with your advisors to bring your estate plan and related financial and personal affairs up to date with your current intentions.

So 2012 is the year to lose that 10 pounds, brush-up on your high school French, and get your estate planning documents and financial documents in order.  We cannot put together an exercise plan for you, and our French is atrocious, but we are here ready and able to assist in getting your estate plan in shape in 2012. 

                                               The Tax & Estate Planning Group

                                               Woods Rogers PLC