It’s never too soon to set up an estate plan

By Yvonne Michaud Novak

It can be crucial that you update your estate plan throughout your life to avoid unintended consequences and complications. Once a disability or death occurs, estate planning options are limited. Issues to consider include asset protection, family disharmony, successor agents, beneficiary designations and joint accounts. Unfortunately, estate planning is always getting pushed to the bottom of the to-do list and most temporary fixes are not adequate. A good example is coordinating your beneficiary designations with your estate plan. Many assets such as 401Ks, life insurance, CDs and annuities have you designate someone to inherit the asset at your death. What happens if that person dies? You should have a contingent beneficiary named for that situation. What if your will distributes your assets differently than the beneficiary designation, which designation trumps? It is the beneficiary designation that rules. Another potential problem is naming a person as your financial or health care agent and they pass away before you. Who is appointed to act then? A contingent agent? What if you already are incompetent and no contingent agent is appointed? Does someone have to get a legal guardianship over you to help you with your financial and health care decisions?

Many people think that by putting their child as an owner of an asset they are avoiding estate planning. This temporary fix has many unintended consequences such as the parent’s asset being garnished for the child’s debts, the asset being subject to the child’s divorce action, or the child taking the asset and not distributing it the way they were instructed.

In your meeting with an estate planning attorney, you should address your current asset situation and what your intentions are. All assets should be discussed including who the owners are and if there are any beneficiary designations. Family nuances should be discussed as the best made plans can be contested when a child has unreasonable expectations. It is never too soon to start your estate plan so that in the event of your untimely death, everything will be laid out for your family and complications will be avoided. Unintended consequences like probate or guardianship can be avoided by keeping your estate plan current. Protect your and your loved one’s futures by setting up an estate plan today!

Attorney Yvonne Michaud Novak is a member of the American Academy of Estate Planning Attorneys, an exclusive national organization. She opened her own law office in 2007 after a varied career which included nursing home administration, estate planning and business paralegal, and work as a certified financial planner.