Creating or reviewing an estate plan is something that many Las Cruces residents know they should do but often put off. It’s natural to say things like: “I’ll take care of it later,” or “I don’t have enough money to have an estate plan.” But life and circumstances happen that may be out of your control. Every adult needs to have an estate plan, regardless of how large or small their estate is. The new year is a great time to make a resolution to create or review your estate plan, explains ElderLawAnswers in a recent article, New Year’s Resolution: Get That Estate Plan Done. No one knows what the future holds, yet legally documenting your wishes ensures your plan decides what happens to you, your loved ones, and your assets. Start off 2024 right by working with an estate planning law firm like E-Law to secure your present and future.
How Do You Create an Estate Plan?
Estate planning provides many benefits to individuals and their families. One of these is relieving stress and uncertainty during a difficult time by providing a clear guide for what you want to happen in the event of your incapacity or death.
Estate planning starts with working with an experienced Las Cruces estate lawyer who guides an individual or family on making a last will and testament and key documents including a Power of Attorney, trusts, and medical directives. Creating an estate plan allows a family to protect investments and other assets during disability or illness and ensure the distribution of property after death. At the same time, taxes and probate are minimized or avoided.
What is a Last Will and Testament?
A last will is a legal document addressing property, assets and investments and their distribution after the owner’s death. If there is no will, New Mexico state’s laws determine how the estate will be distributed. A will is also used to name a guardian for minor children in the event both parents pass away, so every young family should have a will. Without a will naming a guardian, the court will make decisions about the children’s guardian, possibly appointing a person the parents might not have chosen.
What If I Already Have an Estate Plan?
Your estate plan is not a static legal document. As your life changes, so also might your wishes regarding how your assets are distributed after your death. It’s common for relationships, financial circumstances and family dynamics to change over time. Each significant shift in your life may warrant a review and possible update of your estate plan. Consider the list below for reasons why you would want to create or update your estate documents.
Have Family Dynamics Changed?
One of the most common reasons to create an estate plan or update it is when your family dynamics change. Have you recently married, divorced, or welcomed a child or grandchild? These life events may change how you want your estate distributed. It’s important to review any existing estate planning documents to ensure that new family members are included or that former spouses are removed, reflecting your current wishes. If you’ve appointed guardians for your children and these guardians can no longer serve, you’ll need to revise your will. The same applies if your executor or trustee situations have changed.
Did You Recently Move to New Mexico?
Laws governing wills and estates vary by state. If you have recently moved to New Mexico since you last updated your plan, it may be time to review it. The legal requirements in this new location might differ from those in your previous residence, affecting estate administration. Meeting with a Las Cruces estate lawyer like Michele Ungvarsky is advisable to ensure your documents comply with local laws.
Any Changes in Tax Laws?
State and federal tax laws are constantly changing and can impact your estate planning significantly. An increase or decrease in estate or inheritance tax, for instance, could affect the value of your estate that your beneficiaries will receive. Reviewing your plan with a Las Cruces estate lawyer can help you understand the latest tax laws and revise your estate plan accordingly, ensuring that your heirs are protected from possible tax burdens.
Has the Value of Your Estate Changed Significantly?
A substantial increase or decrease in the value of your estate is another reason you should create an estate plan or review it. If you’ve acquired new assets, started a new business, or maybe some assets have depreciated significantly, your current estate plan may no longer reflect your situation accurately. You may wish to redistribute your assets, set up a trust instead, or address the specific needs of a growing estate.
Is Your Beneficiary Information Current?
Beneficiary designations are often ignored and can undo an estate plan. Let’s say that you have a life insurance policy purchased several decades ago, and in the intervening years, you divorced and remarried. Who is the beneficiary named on the life insurance policy? If it’s your ex-spouse, they’ll get an unexpected windfall when you die. It’s equally important to review other estate planning documents, like life insurance policies and retirement accounts, to ensure that all beneficiary designations are up-to-date and consistent with your estate plan.
When Was Your Power of Attorney Last Updated?
Your financial power of attorney is a vital part of your New Mexico estate plan. If your chosen agent is no longer willing or able to serve or your relationship has changed, you may want to revise this document. It is essential to have a trustworthy individual to make financial decisions on your behalf if you cannot do so.
Do You Have Peace of Mind?
One of the main reasons to have an updated estate plan is for your own peace of mind. Knowing that your affairs are in order and your loved ones will be taken care of according to your wishes is priceless. Regularly reviewing your estate plan every few years or after major life changes ensures that everything is up-to-date and reflects your desires. Request a consultation with E-Law to review your plan, or to create one, and make your 2024 New Year’s Resolution a reality!