Life is a balance between living in the moment and planning ahead. We strive to be here now and be present and “mindful” (there’s a cool modern catchword), but also look into the future to organize and arrange our lives effectively.
There’s a saying about planning: there are people who make it happen, people who let it happen, and people who wonder, “What happened?” Planning is an imperfect exercise in trying to shape the future. Don’t be one of the people who wonder “What happened?” when you can try your best to make it happen.
Here are seven legal strategies that anybody can use. It is not a comprehensive or exhaustive list but some suggestions and ideas to ponder or use.
1. Estate planning: A must do!
I help my clients do this every day. Make plans and arrangements for the future using Powers of Attorney, Wills, Trusts, deeds, etc. the goal is to try to ensure that the people you want to be in charge to help you, are in charge at the right times, to do what you want them to do, and for the right people to inherit from you, in the way that you want. The idea is to write it down and sign it, to make it stick later.
Powers of attorney say who will help you during your lifetime. Wills say who will inherit from you, how and when, and who is in charge of the paperwork and decisions. Trusts serve lots of purposes, but at their most basic, provide for a responsible adult to help someone else who needs help to receive or handle an inheritance, gift, etc. (for example, children, someone with a disability, etc.). Often my clients have individuals who they don’t want to inherit, or don’t want to be in charge, and we disqualify or exclude them.
Don’t get caught dead without it.
2. Use written agreements
Here are the best three pieces of free legal advice I can give anyone: “Put it in writing, put it in writing, put it in writing” – even with family. Whether it’s an IOU, an informal lease, any real estate dealings like buying property together, or a job or employment agreement, putting it in writing requires you to think it through enough to be able to write it down, including the “what if’s” that might occur. Make agreements in advance, to prevent disagreements later.
3. Close old estates
Frequently a new client says, “The house is still in grandma’s name, she’s been gone for years, but we never got around to finishing the estate…” or “I knew we had to pay inheritance tax, but we never did.” Take care of old unfinished estate business. The more time that goes by, the harder and more costly it may become. Trying to get the signatures of a whole bunch of heirs later on is a real pain.
4. Check and update beneficiary designations
Even if you don’t have a will or trust, you probably do already have an estate plan in place, consisting of the beneficiary designations that you’ve made on life insurance policies, IRAs, investment accounts, or with joint bank accounts, etc. Confirm that they are the way you want.
5. Gather, organize and secure your records
Make it easier instead of harder for your family later to help you handle your affairs, or wind up your affairs. Get your information together and tell somebody where it will be (or at least, don’t make it hard to find). Lots of online services and written binders are available. Include: Wills, Powers of Attorney, deeds and leases, loan papers, health care info, military and insurance records, birth, marriage and death certificates, cemetery plots, car titles, funeral plans, tax returns, asset records, people to contact, family photos and mementos etc.
6. Name your guardians
If you have young children, what can be more important than naming the Guardian(s) who will raise your children for you if you are gone? A Guardian will have both the right to make decisions, and the obligation to care for them properly – if they accept. This designation happens in the parents’ Last Will and Testament. But as an adult, if you become disabled, you can also name the person to serve as your own Guardian, in your Power of Attorney. There are actually two jobs: Guardian of the Person for care, education and placement decisions, and Guardian of the Estate, for money and financial matters.
7. To marry or not to marry
If you’re thinking about whether or not to marry, especially in a second or later marriage, get informed about the legal and financial pros and cons before deciding. Legal and financial implications can include income tax breaks for married couples, healthcare insurance options, inheritance and estate tax savings, liability for or protection from a spouse’s long-term care costs, effect on Social Security benefits, protecting assets from creditor liability, and more. When there’s imbalance in the wealth that partners bring to the marriage, consider a prenuptial agreement to force you to think through, clarify, agree on and lock in your expectations about money and property.