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Deland on Estates and Elder Law

Sunday, December 14, 2008

Why Now Is the Perfect Time to Plan Your Estate

Your estate consists of all the things in the world you own and control outside of your own skin: from jewelry, to your house, bank accounts, insurance, investments  and retirement accounts. Right now, the markets are saying that some of these things are not worth as much, in dollar terms, as they were at one time. Your retirement and investment accounts may have lost value due to the decline in the stock market. Your house or condo may not be worth as much as it was, or even as much as you paid for it.  Does this mean that you may no longer have an estate worth planning for?
 
What if you were in a car accident, alive but in a coma, unable to manage your own affairs?   The mortgage and the utility bills would still have to be paid. Maybe someone would have to sue the other driver. Even if you are married, with a joint account, your spouse could not sue on your behalf, access your retirement accounts, or deposit a check made out to you. If you have an estate plan in place, someone else would be able to use your bank account to pay your mortgage, and a document called a Power of Attorney would let them sue on your behalf and do many other things. If you have no plan in place, their only option would be go to court to have you declared incompetent. Your control over your property would then be taken away from you, probably permanently, and given to the person who would now be your guardian. 
 
What if you died in that accident and you had no estate plan in place? Someone would have to file a lawsuit to transfer the things you own and control to your closest blood relatives. If you were single, that would be your parents, if they were alive, otherwise, your siblings. What if you had been living with someone as a couple, but you just hadn’t gotten married yet? That person would be out of luck. What if you are divorced, with children? Your ex, the children’s “natural guardian” would get the kids and the stuff, too.   What if you were married, wouldn’t your spouse just get everything? Not necessarily, and if he or she did, that fact might cost your family dearly in estate taxes down the road.  
 
How do you want to be remembered, as someone who had no plan, or as someone responsible, who thought about the people in your life and provided for their needs?
 
None of the reasons why estate planning is a good idea go away because the market went down. You still have people in your life. You still want to make it easier for them. You still don’t want to have people telling your loved ones that you were an idiot for not planning, even if you won’t be around to hear about it. 
 
So why is now the perfect time to plan? Because, it is cheaper to plan when asset values are down; estate planning lawyers often base their fees on the value of the estate.  

And, if you have an estate tax problem, meaning that your total estate (including insurance and retirement plans) might be over a million dollars if you are single, or two million for a couple (this is in Massachusetts), there is an added advantage to planning now. Now is the time to lock in lower valuations and add what would have been paid in estate taxes, had you not planned, to the amount you can leave to the people you care about. So now is really the perfect time.

So, if you have put it off until now, pick up the phone and call your attorney. The window of opportunity is closing fast. Before you know it, we’ll all be feeling rich again.

 
 



Jennifer A. Deland, Counselor-at-Law advises clients throughout the Metrowest area, including Holliston, Hopkinton, Milford, Medway, Medfield, Ashland, Framingham, Natick, Sherborn, Dover, Southborough, Sudbury and Westborough.

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