We idealize the holidays: families celebrating together, opening Christmas gifts or lighting Hanukah candles, eating holiday dinner and sitting before an open fire. But things don’t always go according to the scripts in our heads even here in San Antonio, Texas. Some years, the bakery might forget our order for pumpkin pie or Uncle Harold might refuse to stop dissing a political candidate the rest of the family loves. It’s par for the course. Life can be messy, and the holidays are no exception. However, we can use the holidays to bring more harmony to our lives by taking advantage of what may be one of the few times during the year that everyone is together. The holidays are an opportune time to hold an annual family meeting to discuss estate plans, powers of attorney, medical care wishes and other topics.
Why Regular Family Estate Planning Meetings Are Important
To avoid heartache, recriminations and frustrations later, it’s important to keep your family informed now. Do you think we’re exaggerating? More than half of adult children don’t know even know where their parents keep their estate documents. And if Dad’s will is never found, it may as well not exist. Doing a scavenger hunt for a will on the eve of a parent’s funeral is a lot more stressful than taking an hour once a year to discuss family matters.
You will, of course, have your own list of items you want to discuss with your family, and you will want to get more ideas from your Texas estate planning attorney. But let us give you a nudge toward some important items you may want to consider.
Don’t Play Hide and Seek with Documents and Assets
Before you do anything else, make sure your family knows where you keep important documents, information and property. If you feel it is not appropriate for everyone in your family to know the location of every item, at least be sure they have the name of your executor or financial advisor to whom you have given the information.
- Documents: Write down the location of important documents such as estate documents, insurance documents, deeds, leases, stock papers, vehicle titles, powers of attorney, medical information, insurance policies, financial documents and business documents should you own a business.
- Financial accounts: Make a list of all your financial accounts including location, account numbers and online passwords. You are not going to want to give your passwords to everyone, but make sure they are available to someone you trust such as your executor or financial advisor.
- Major assets: Make a list of all your major assets including real estate, deeds, leases, life insurance policies, bank accounts, pensions and stocks and bonds along with any needed account numbers. Did you buy a bit of land thinking you might build a house and retire to the Caribbean on your last vacation? Be sure your kids know about it.
- Digital property and passwords: More and more property that was once tangible is now digital. This could be anything from business plans and business email to record collections. But if your kids don’t know how to find your digital assets, and if they don’t have the passwords, it can all be lost.
- Debts: Be sure to keep a list of your debts, credit cards, loans and creditors, or your heirs could be in for a nasty surprise.
Who’s Who: Update Your Contact List
Along with lists of documents and assets and their locations, be sure your family knows where to find your important contact information and a description of the services each professional handles for you. This should include
- Insurance agents
- Business partners, vendors and other key personnel if you own a business
- Financial advisor
The individuals who serve these functions may change from year to year, so don’t neglect to keep those who need to know updated with this contact information.
Avoid Drama: Keep Estate Planning Transparent
We’ve all seen those movies where the patriarch or matriarch dies, and the family solemnly gathers for the reading of the will only to be shocked at its contents. It may (or really may not) make for good TV, but you want to avoid this scenario at all costs in real life. Your family should know what to expect when you die. If you play it close to the vest, you are inviting lengthy probate proceedings and litigation.
As the World Turns: Update and Share
Babies are born, people marry, divorce, change affections, buy and sell property and die as the world goes around. This means you will need to regularly update your will and trusts to reflect your current wishes. There have also been a lot of changes in tax laws in recent years, which may have impacted the trusts you’ve created. No doubt you have already discussed this with your Texas estate planning attorney but bring your family up to speed on any changes you have made.
Don’t Be Coy: Discuss the Identities of Your Executor and Trustees
Be sure your children and other key family members know the identity of the executor of your estate and how to reach them. If any of your children have a strong objection to your choice of executor, now is the time to find out, not when problems arise after your death.
Another thing you may want to discuss if you haven’t already is who you are appointing as trustees for your children’s trusts. If you are setting up individual trusts, which is highly recommended in order to decrease the potential of conflict, you need not appoint the same trustee for each child’s trust. This need not be a general family discussion, but you may want to draw each adult child aside to discuss whether your choice of a trustee for their trust meets with their approval.
Whoops! Don’t Forget Other Beneficiaries
Trusts and wills are not the only documents you might change due to births, deaths and waxing or waning affections. Sometimes people forget to change the beneficiaries of life insurance policies, pensions and other financial instruments. Be sure to keep your beneficiaries up to date and inform your family when you make any changes. An ex-spouse has enjoyed a windfall more than once due to forgetfulness. Also, discuss coverage of insurance policies and amounts of pensions with the beneficiaries so they can better prepare.
To Your Health: Medical Power of Attorney and Health Care Directives
It’s a good idea to set up documents expressing your wishes regarding medical care and granting a trusted person a durable Medical Power of Attorney that kicks in should you become incapacitated. In Texas, you don’t need witnesses to set up a Medical Power of Attorney, Directive to Physicians or an Out-of-Hospital Do Not Resuscitate Order. A notary will do just fine. However, you do want your spouse, children and other close family members to know the contents of these documents and to understand your views on health care and resuscitation. You should be the one to inform your family to whom you have granted power of attorney in a medical emergency, not the one holding that power. If your family understands the structure you have put in place, all will run much more smoothly if the time arises for your designee to exercise medical power of attorney.
Keep the Lights Burning: Financial Power of Attorney
Along with planning for your health, you need to plan for what will happen with your finances should you become incapacitated. After all, someone must pay the bills and oversee income and assets. You may decide to give a family member durable financial power of attorney should you become too incapacitated to oversee your own finances or even pay your bills. This could be the same person to whom you grant medical power of attorney but need not be. Make sure your arrangements for financial power of attorney are transparent to all key family members, so you can discuss any objections with them while you are still in control of your finances.
Don’t Be Stingy: Consider Strategic Gifts
You don’t necessarily need to do this at a family meeting, but the end of the year is a good time to consider making strategic gifts. Many estates are too small to be taxed under federal law, but large estates were affected by the Tax Cuts and Jobs Act, (TCJA), P.L. 115-97, which went into effect January 1, 2018. It doubled the exemption for estate and gift taxes. However, double exemption is only good until 2025 unless Congress extends it. So, you may want to consider taking advantage of the double exemption soon, in case it is not extended.
Do We Really Need to Have a Family Estate Planning Meeting at the Holidays?
If you have not had a family meeting, and you have neglected discussing some of the items listed here, then it would be very wise to go ahead and do it soon while your family is in town for the holidays. A lot can happen in a year. Of course, if your entire family lives within a few miles of each other, you might plan it for another time. But since people have already set aside time for family at the holidays, it might be easier to meet over the upcoming holidays even if your relatives are nearby.
If you don’t plan and keep your children informed, you may be placing a large and unnecessary burden on them should you become incapacitated or die. With a little thought, you can find a time that won’t interfere with assembling Susie’s new toys. Usually meetings will just involve family discussions, but should you need to sign documents that require the presence of a lawyer or a notary, be sure to plan well in advance.
Call the Law Offices of Shann M. Chaudhry Esq., Attorney at Law, for a Free Consultation
If you want to be sure you are covering your bases for planning your estate and the future of your family, or if you want to discuss having a family estate planning meeting, call the San Antonio law offices of Shann M. Chaudhry Esq., attorney at law, for a free consultation. Our experienced Texas attorneys provide estate planning, business planning and real estate law services. Contact us at (210) 646-9400 to schedule an appointment.