Father Time and Baby New Year are back again, and that means it is time for New Year’s resolutions. If you’re looking for a resolution that is easy to check off, can take care of three things in one shot, and can let you sleep better at night, try this one: do (or renew) your estate plan.
A good estate plan can take care of three big things. First, an estate plan can protect assets. If done correctly, an estate plan can shield assets from the creditors of your loved ones when you leave them an inheritance. You can also shield assets from your own creditors to a certain extent. Much of estate planning is identifying threats to you and your family’s long-term happiness and taking steps to eliminate those threats. For example, if you’re worried your children (or grandchildren) won’t be responsible enough to save their inheritance, you could put it in a trust until they reach a certain age where maturity will likely have set in.
Second, an estate plan can provide for your family members, financially and emotionally. For example, I have a letter to my son in my estate plan explaining why I’m leaving him my wedding ring. Sure, it’s my wedding ring, but before that, it belonged to my grandfather, “Pops”. Pops had worn it as a right-hand ring for years, and I’d always admired it. He offered me the ring when I was in college, but I was smart enough to realize that I was too young to be a good steward of it, and refused. When my wife and I were engaged, we couldn’t decide on a wedding band for me until I remembered Pops’ old offer. I summoned the courage and asked if I could use it as my wedding band. I’d barely finished my sentence before he was taking the ring off his hand and pressing it toward me with teary eyes.
Pops has passed since, but his ring is a great reminder of who I am and where I come from. It’s something I want my son, Simon, to have and hopefully see the same value in when he’s old enough. How would Simon know what the ring means in our family if I don’t tell him? That’s something a good estate plan can provide.
Finally, a good estate plan can help you prepare for your own needs while you are still living. As mentioned before, there can be creditor protection in some scenarios, but there’s also the planning for “what-if” scenarios such as periods of incapacity or disaster preparedness. How will you get in touch with your insurance agent if a tornado hits your house? Will your spouse or a trusted child be able to access your accounts to pay the bills if you have a heart attack? Having a good estate plan can provide peace of mind and have you ready to handle a wide array of issues.
If you want to make a New Year’s resolution that sticks and has measurable, meaningful results for yourself and your family, start or renew your estate plan. Let me know if you want me to help.
See you on the trail.
Post by Peter Harrison