‘Tis the season to surround yourself with your loved ones to enjoy one another’s company. With family together this holiday season, now is a perfect time to discuss estate planning. It's also an ideal time to plan for the future.
While Estate Planning may not immediately be the first thing that comes to mind over the holidays, it's a great step to take in order to have some hard conversations. What would happen in a medical emergency, or your last wishes? Who would inherit your most cherished items?
The end of the year is a time where things start to slow down a bit and you make some space for family gatherings. You may also want to have a conversation or two with those who mean the most about your plans for the future.
Here are some estate planning tips to follow this holiday season as you gather around the table to feast.
All In It Together
One of the best things about the holiday season is that your family is all in one place together, even if it's just for a short amount of time. Now more than ever, is a great time to have conversations around estate planning.
End of life plans and who gets the family home after you’re gone can be a hard thing to talk about. However, with everyone in one space it makes easing into these conversations a bit easier. When it comes to estate planning, more than 70 percent of families lose their wealth by the second generation, and 90 percent by the third. Nasdaq reports that this wealth loss occurs for three key reasons:
- Families do not talk about money
- Older generations worry that younger generations will develop bad habits
- Many individuals lack the education and training on the value of money, or how to handle it.
By strategizing now you can have clear and concise conversations about what your vision and intentions are.
Conversations to Cover
Once you’ve done the hard part of having the conversation, you’ll want to have an idea of what topics to cover. Most people assume that estate plans cover just inheritance–when there's actually a lot more to cover.
- Medical
Estate planning is often associated with making sure that your loved ones are taken care of after you're gone. But did you know that an estate plan can also help you live a healthier, happier life?
You may think that your family members know what to do in the event of your incapacitation, but they might not have thought through all of the details. Make sure they've signed healthcare directives and selected Power of Attorney(s) so that their wishes are carried out in the event of a medical emergency.
- Roles
Most estate plans come with several roles, each of which can be filled by a family member if you so choose. Sit down and discuss with your family to find and name Executors, Guardians, and Powers of Attorney (medical, financial, etc.)
- Insurance
Now is the time to talk about money and to make sure everyone has obtained or is in the process of obtaining a life insurance policy. Lastly, make sure they have named a beneficiary.
- Estate
It's common for immediate households to discuss assets, but it's rare for extended families to gather and discuss family estates as a whole. One of the best ways to tackle this is to talk about the family estate with their aging parents about plans to divide up the estate. This may feel like an awkward conversation at first, but it's better to be transparent and hash things out now to prevent infighting and ugly court battles in the future.
For example, you might discuss who will inherit what pieces of jewelry or art work in your family. If one sibling doesn't want something because they already have a similar piece of jewelry, perhaps you could donate it —or give it to another sibling who hasn't inherited anything yet.
- Taxes
Taxes and estates are a tricky subject. There are several estate and inheritance taxes, including generation-skipping taxes, that could affect the overall wealth of the family. This can be a complicated topic for families to discuss, but it's important to have these discussions early on.
If Not Now, When?
If you're reading this, you're probably not just thinking about estate planning—you've already decided to take action!
And if it's time to get started on your estate plan, there's no time like the present. As we've discussed above, the holiday season is a time when the whole family comes together to celebrate the season and all they must be grateful for. It's a time of bonding and looking forward to the future, and it's the perfect time to ensure that you're protecting yourself and your family, no matter what happens.
Working with Agemy
When it comes to estate planning, having a financial advisor that you trust is crucial to your planning success. The best way to protect yourself, your family, and your assets is by having a comprehensive estate plan in place.
An effective estate plan enables you to manage your affairs during your lifetime and control the distribution of your wealth after death. It can also spell out your healthcare wishes and ensure that they're carried out – even if you are unable to communicate. It can even designate someone to manage your financial affairs should you be unable to do so.
Wishing everyone a safe, happy and healthy Thanksgiving from the entire team at Agemy Financial Strategies.