How To Wednesday…Begin To Plan For Your End.

My husband just celebrated a birthday this week. We are still young people, with children, a home, cars, life insurance policies, modest investments and debt.  Personal disclosure coming – we do not have an estate plan.  It’s just something we keep saying we need to do, but never actually get around to.

Most of my estate planning clients fit into a fairly predictable stereotype.  They are not thirty-something couples with minor children.  I am not surprised by this. Many people in our age bracket are simply too busy living to worry about or plan for dying. Many don’t know where to even start with the planning process. Many think it will cost too much money to get their things in order. My “How To” for this week is going to be the first steps you need to take to make an estate plan.

Step One:  Take inventory.  Of everything. Bank account and loan balances, values of real estate and vehicles.  Don’t forget the “toys” a/k/a snowmobiles, atv’s, motorcycles, and your beloved puck collection that you started at age four. As for the household goods (dishes, furniture, clothing, kids’ toys) what would it be worth if you sold it all in a garage sale? Create your very own net-worth statement that includes account numbers and names of the banks or investment companies you have assets or debts with.

Step Two: Think, very seriously, about what you would want to happen with all that stuff if you died.  Are there particular family heirlooms that you want to pass on to children, nieces or nephews?  Would you like money from your life insurance policy paid to a designated charity or to your kids’ college funds?  Speaking of kids, if they should need a guardian appointed by a court, who do you want that to be? How about an alternate?  If you are married, this should be a conversation.  Keep in mind that you and your spouse do not need to agree about everything.  Your plan can be different from your spouse’s plan.

Step Three:  Do some of the work yourself.  Many of your assets, such as bank accounts, life insurance policies, car titles, can be shared or designated to a specific beneficiary.  This is what a joint checking account does.  It creates two owners and when one dies, everything goes to the survivor.  If you are reluctant to share assets now, most financial institutions offer pay on death (POD) beneficiary designations.  You can name who gets your account when you die.

Step Four:  Talk to a lawyer.  Now that you have a comprehensive plan in mind, it is worth the time to talk to someone who might be able to explain what Wills, Trusts, Powers of Attorney, and Health Care Powers of Attorney are, what they do, and how they affect or assist the other planning you’ve already taken care of. There are concepts you need to understand, such as what property is part of your “taxable estate” versus your “probated estate”.   You need to understand the implications of dying with a will versus without one. You deserve to understand the power that you might be signing over with a Power of Attorney. You should have a grasp on any tax implications that may come from your death. The lawyer is going to suggest various documents and options to you.  If you don’t understand completely what the lawyer is suggesting, ask questions until you do understand.  After all, this is your plan, not your lawyer’s.  If you are worried about the cost of talking to a lawyer, call me.  I do not charge for initial consultations.

Johanna R Kirk

Kirk Law Office, L.L.C.   1418 Tower Ave. Suite #6; Superior, WI 54880  (715)-718-2424