What's in your future?
(From the March 2006 Manley Society Newsletter)
Of all the people throughout history who have reached age 65, over half of them are alive today. Someone born in the United States today has a life expectancy of over 77 years. In 1950 it was 68 years; in 1900 it was only 47 years. Clearly we are living longer than even our very recent ancestors.
With this increased longevity comes increased responsibility and opportunity for ourselves, our loved ones and society. More than any previous generation, we must plan for a longer maturity, and more than any other generation we have the chance to make a difference in the lives of others.
Your future may be in the cards, but who is shuffling the deck?
With the blessings of a longer, healthier, richer life comes the need for a sound, flexible estate and philanthropic plan. If you don’t plan now, someday surely the burden will fall to someone else. Consider the benefits of a well-crafted, thoughtful plan:
- You make the decisions. Your estate will be distributed to loved ones and charity as you wish, and not how lawyers or the courts may decide.
- You direct health care. Loved ones will know the extent and types of care you may or may not wish to receive.
- You maximize benefits. After a lifetime of careful stewardship, why would you want poor planning to waste assets that could go to heirs?
- You minimize turmoil. A good plan will ease the emotional strain and grief on survivors at a very difficult time.
- You create your legacy. You craft it for heirs and charity by saying thank you, and you teach lessons about the priorities of your life and what is important for the future.
- You retain control. A good plan will allow you to retain control and dignity for as long as possible, and others will know your wishes.
There’s no time like the present
Now is a good time to create or update your estate and philanthropic plan. A thoughtful, flexible plan will bring peace of mind now and allow further refinements later on.
Eight components of a good plan:
- Health Care Proxy - a document in which you appoint a person and a back-up to communicate health care decisions for you if you become incapacitated.
- Living Will - a document that expresses your wishes regarding end-of-life decision-making, to be followed by the person and back-up you appoint in your Health Care Proxy.
- Power of Attorney - a document in which you appoint a person and a back-up to act in your behalf regarding financial and property matters.
- Will – a document that will direct the distribution of assets you own individually at the time of your death. It also provides administrative directions and can provide directions regarding the payment and allocation of estate taxes.
- Living Trust – A will substitute that directs the distribution of assets titled to the living trust going through court-supervised probate. (In New York State, it would be coupled with a pourover will to “catch” any assets remaining outside of the trust. It will also direct the management and distribution of trust assets if the creator of the trust has a period of incapacity prior to the creator’s death.)
- Beneficiary Designations – These are written contractual obligations between a financial institution and an owner of an asset to document the owner’s intent as to what persons or charities will receive the asset after the owner’s lifetime. Used for insurance policies, annuities, IRAs and other retirement savings plans such as 401(k), 403(b), and 457 plans.
- Re-titling of Assets – Cross-referencing the legal ownership of assets with one’s estate planning and tax planning.
- Philanthropic Legacy – This may be a personal statement that defines your philanthropic goals and that you use to incorporate philanthropic planning strategies into your financial plan.
Just do it.
If the task seems daunting, begin with two simple lists. Before meeting with your attorney, create one list with the names of family, friends and charities you want to benefit. On the second list, itemize your assets, how they are currently titled, and which ones have beneficiary designations (our Estate Planning Organizer can help with this). As you move through the planning process, organize and keep your materials to facilitate updates to your plan later on.
Resources to help.
The level of planning exercised by previous generations is insufficient to today’s society. A lifetime of hard work and careful shepherding of resources deserves a few hours of your time to maximize its benefit for you and future generations. St. Lawrence has many resources available to aid your planning:
Remember you can always contact us for help or to order materials.
