pile of money with plant growing out of it

New Year’s Resolution Estate Planning!

It’s the new year and with that comes new goals! Usually, people vow to get in better shape or to save money for something big. However, we tend to start off strong and have no follow-through. Creating an estate plan is a lot like getting into better shape. We all know we should do it, but most of us never make it to the finish line because the task seems daunting.

Did you know that only 40% of American adults have a will? That means that you’re not the only one adding this task to your resolution list for the New Year! If you’re ready to finally make your estate planning resolution a reality in 2021, here are 5 basic things you can do to get the ball rolling:


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  1. Take Inventory

You may think you don’t own enough to justify estate planning. But once you start taking inventory, you might be surprised by all the assets you actually have.

Some tangible assets that could be included in your estate are the following:

  • Homes, land, various property, etc.
  • Vehicles of transportation (Cars, motorcycles, boats, etc.)
  • Collectibles such as art pieces, trading cards, or antiques
  • Personal possessions

Examples of intangible assets:

  • Checking and savings accounts (Certificates of deposit)
  • Stocks, bonds, mutual funds
  • Life insurance policies
  • 401 (k) plans or other individual retirement accounts
  • Health savings accounts
  • Ownership of a business

When estimating the value of your tangible and intangible assets, outside valuations such as recent home appraisals and statements of your financial accounts can be particularly helpful. By determining the value of these items, you can ensure that your possessions are distributed equally amongst the people you love and care about.

  1. Minimize/Avoid Estate Taxes

They always seem to be inevitable, but taxes are something you can mitigate. One way you can minimize estate taxes is to make a qualified charitable distribution (QCD) from your IRA. This goes towards funding a 529 college savings account and gives you the opportunity to utilize the unlimited marital deduction through something known as estate tax portability.

A common way to dip under the estate tax threshold is to give away your estate. This doesn’t come without its downsides, however, giving your estate to your child relieves you of your ability to control who lives there, meaning it could be sold, mortgaged, or seized by your child’s creditors. This idea also prevents your heirs from receiving a step-up basis on their property.

This can be a great way to reduce the size of your estate, but it must be done with extreme care and at the discretion of an experienced estate planning professional.

  1. Review Your Beneficiaries

It’s always better to be safe than sorry. In this case, always make sure that your will or trust accurately reflects who you want to inherit your estate. There can be a variety of factors that influence this decision.

Relationships often change over time. For example, divorces, separations, or deaths will obviously have an impact on your estate plan. Marriages, births, or other new relationships can have a similar effect. Taking these events and changes in relationships into account are essential to this part of the process. Look at your assets and think critically about who you want them to go to.

In addition to this, make sure assets with pay-on-death designations (insurance policies, retirement accounts, etc.) align with the goals of your estate plan. The provisions of your estate plan can be overridden by beneficiary designations, so be very careful.

  1. Estate Planning Letter of Instruction

This part of the process won’t be easy, but it’s very important and will help expedite your estate planning. Drafting a letter of instruction will spell out what exactly needs to be done. This will help guide your representatives through the administering of your estate. We cannot tell you how to necessarily write this letter, but it should, at the very least, include the necessary estate planning documents you have access to, the location of your assets, and instructions for your representatives for the next steps to take.

This letter will likely be read by your loved ones. During this difficult time, try to ease their burden by giving thorough and detailed instructions to help them through the entire process.

  1. Review Your Estate Plan With an Attorney

Now that you have a solid foundation and have put all of your information together, it is time to have a professional look over your estate plan. Estate planning can be very complex and confusing, so having a good set of eyes to look things over can be very helpful. It is easy to have certain things slip through the cracks, and we want to make sure all of your assets are accounted for, so nothing is left out.

Because estate planning is not a “one size fits all” situation, consulting with an attorney will ensure that your best interests are held closely. There are also laws that are subject to change over time, so reaching out to a knowledgeable individual will make you feel at ease.

Estate planning is very important, and you don’t have to be filthy rich to take part in it. Your estate includes everything you own and could be of any size, which means it can be applicable to anyone. Making time to plan and allocating proper resources to your strategy will be beneficial to you and your family.

In the midst of the COVID-19 pandemic, there are a variety of resources to get your estate planning going in the right direction. At Lowthorp Richards  we live and practice in Ventura, Santa Barbara, and San Luis Obispo counties. We are a client business service and provide prompt and cost-efficient legal services with specific expertise in estate planning.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Cristian R. Arrieta, Lowthorp Richards McMillan Miller & Templeman, A Professional Corporation, 300 E. Esplanade Drive Suite 850, Oxnard, CA 93036