Quick & Easy Legal Tips: End of Year Action Items

Quick & Easy Legal Tips: End of Year Action Items

The end of the year will be here before we know it. But there is still time to meet some significant end of year goals before December 31. Here are 10 quick and easy legal tips to improve your situation:

Tip 1: Basic Estate Planning: Did you know that most estate plans can be completed by lawyers quickly and for a relatively modest cost? Set the end of the year as your deadline to finally get this accomplished. If you don’t have an attorney, ask friends and acquaintances for referrals. If you aren’t sure about some decisions, your attorney can help you. If money is tight, start with basic documents you can afford (a will, power of attorney, health care documents) and upgrade when you can (and, if necessary).

Tip 2: Review Important Legal Documents: If you already have an estate plan, pull it off the shelf and review it. Make sure it still reflects your wishes, all the persons named in the document are still living, and (importantly) the nominations of executors are still correct. Revisions should be made any time there are changes in your family (birth, death, marriage, divorce, remarriage), your finances, tax laws, or if a trustee or executor can no longer serve. Now is a perfect time to do this; if there are changes you want to share with family members, you can do that when you are together for the holidays. (See #9 below). Also, if there are other important documents (e.g., beneficiary designations, insurance forms, etc.) that you should review, take the time to look through them and ensure they comply with your current situation.

Tip 3: Encourage Family Legal Planning: Talk to your close family about their estate plan. Verify that those close to you (like parents, siblings and adult children) have their own estate plan in place. In many cases, your family will rely on you in end-of-life circumstances or disability. Making sure they have their affairs in order will help you and them. 

Tip 4: Wrap the Gifts: If you may have a taxable estate (more than $5.0 million, indexed for inflation), you should consider making any tax-free gifts that your lawyer or tax professionals have suggested. Under current federal law, you can give up to $14,000 to as many people as you wish each year. This is a great way to reduce the size of your estate over time. For example, if you give $14,000 per year to your two children and three grandchildren, you would remove $70,000 from your estate in just one year and $350,000 in five years. (You can double these amounts if you are married.) Charitable gifts are unlimited. So are gifts for tuition and medical expenses, if you give directly to the institution.

Tip 5: Health-Care Document Update: Secure/update health care documents. These include 1) Durable Power of Attorney for Heath Care, which gives another person legal authority to make health care decisions (including life and death decisions) for you if you are unable to make them for yourself; and 2) HIPPA Authorizations, which give written consent for doctors to discuss your medical situation with others, including family members.

Tip 6: Protect your Kids: Review/update guardian for minor kids. The person you name as guardian for your children when they are small may not be the best choice as they get older. This person could also change his/her mind, move away, become ill or die. Revisit your choice from time to time, and name a back-up in case your first cannot serve. If you haven’t named a guardian who is able and willing to serve and something happens to you, the court will decide who will raise your kids without your input.

Tip 7: Beneficiary Designations: Review/update beneficiary designations. This is critical if your beneficiary has died or if you are divorced. If your beneficiary is incapacitated or is a minor, setting up a trust for this person and naming the trust as beneficiary will prevent the court from taking control of the proceeds. You should also check your insurance beneficiary designations, payable on death designees (at the bank), and any other places that a written benificiary is required.

Tip 8: Call Your Insurance Agent: Review/update your insurance. Check the amount of your life insurance coverage and see if it meets your family’s current needs. Consider getting long-term care insurance to help pay for the costs of long-term care (and preserve your assets for your family) in the event you and/or your spouse should need it due to illness or injury.

Tip 9: Communicate: Talk to your children about your estate plan. You don’t have to show them bank and financial statements, but you can talk in general terms about what you are planning and why. The more they understand it, the more likely they will accept it (and their acceptance will help avoid discord after you are gone). You can also talk to them about your values and the opportunities that money can provide. Even better, show your values by example–the holidays are an excellent time for families to do charitable work together.

Tip 10: Protect Yourself (By Protecting Kids): Get basic documents for your unmarried kids who are over 18. It’s a mild shock when we learn we can’t see our college kids’ grades without their permission, even though we pay the tuition. It can be much worse if they become ill. Unmarried adults (18 and over) need the documents in #5 above so you can act on their behalf in a medical emergency. And, while you’re at it, have your attorney prepare a Simple Will and Durable Power of Attorney (for assets). Hopefully, these will not be needed but if an event does occur, you will be glad you have them.

NEED LEGAL HELP? Call our firm today for a free consultation. 

ATTORNEY CHRIS PARVIN is Board Certified in Estate Planning & Probate Law by the Texas Board of Legal Specialization. Mr. Parvin is the Managing Partner of the Dallas, Texas law firm of Parvin Law Group, P.C. and serves as an Adjunct Professor of Law at Texas A&M University School of Law. Mr. Parvin can be reached by email at chris@parvinlaw.com

Parvin Law Group, P.C. is a Concierge Law Firm in Dallas, Texas with attorneys practicing law in the fields of Estate Planning, Probate, Business Law and Family Law.