The Importance of Estate Planning

Many people believe that unless they have substantial wealth or are in their golden years, estate planning is not necessary. However, this is not true for many reasons.

Many people believe that unless they have substantial wealth or are in their golden years, estate planning is not necessary. However, this is not true for many reasons. Estate planning provides not only asset protection, it also ensures minor children are protected in the event of a medical emergency or your untimely passing. It allows you to minimize taxes on assets that pass to your beneficiaries (i.e. retirement accounts). In the event that you become unable to handle your own financial affairs, estate planning allows you to name someone you trust to make medical decisions on your behalf. An estate plan is vitally important to ensure that your legacy is protected, your loved ones are provided for, and your assets are preserved, managed and distributed according to your wishes. In addition, each state has different laws with respect to guardianship of minors, the inheritance of assets, and the probate process. The cost, both monetarily and emotionally, to administer an estate without an estate plan may cause an undue burden to your loved ones.

An estate plan is one of the most important things you can do for your loved ones.  It also may be a task that many of us prefer to put off as long as possible and in some cases until it is too late. Estate planning does not need to be overwhelming.  There are several basic legal documents that will set forth your wishes. These documents are not costly to prepare and ensure that your family is provided for, taxes are minimized and probate fees avoided. Failing to make plans for your estate can lead to unintended complications and costs for your family. The basic estate planning documents are as follows:

  1. Last Will and Testament — This document allows you to name an executor to oversee your final wishes (i.e. funeral, disposition of personal property) as well as to financially manage and distribute your assets. It gives you the authority to appoint a guardian for your minor children to oversee their custody and care. If you pass away without a will, your state’s laws decide who gets your assets and other property.
  2. Durable Power of Attorney — This document appoints and gives a trusted family member, friend or advisor the ability to act on your behalf for financial and legal matters.
  3. Living Will — Sometimes referred to as an advance care directive, outlines the kind of medical care you want if you become terminally ill.
  4. Health care durable power of attorney — This document permits you to name someone to make health care decisions on your behalf if you become incapacitated and cannot make medical decisions for yourself.
  5. HIPAA authorization — The Federal Health Insurance Affordability and Accountability Act sets privacy rules for patient records, and this document allows you to name people to be treated with the same rights you have regarding disclosure of medical records. This document provides that family members may communicate with doctors and nurses on your behalf. Without this document, medical professionals are unable to communicate with your loved ones.

The Covid-19 pandemic has created a greater need for individuals to address whether their estate plans have been prepared and/or updated. We are living in unprecedented times, and ensuring that your estate plan is current is more important than ever.

During this time when we are spending more time at home, it is a perfect opportunity to list your assets, personal property and your final wishes including health care wishes in the event of your hospitalization or untimely passing.  Times like this remind us that we should review our estate plans to ensure our plans reflect our wishes. Some questions we should be asking ourselves include:

  1. Are the named executors and/ or trustees still able to serve?
  2. Does your plan direct that your property pass to those you wish to benefit?
  3. Have there been any major life changes such as change in marital status, births, deaths, changes in residence, major purchases or sales, or property located in another state?
  4. Are the beneficiary designations on your retirement accounts and life insurance policies up to date?
  5. Be sure all health care directives are executed and up to date and that copies are readily available.

In addition to the pandemic, the current financial and political climate (including the volatility of the stock market) makes today a perfect time to address and/or review your estate plan. This includes reviewing current tax laws that may offer many opportunities to transfer wealth to children without the imposition of estate or gift tax. Also keep in mind that many of these tax advantages are scheduled to expire in 2026 if not sooner.


CDL Experience​

If you’d like more information about this article or questions about estate planning, please contact CDL’s Tax Director Patti Giarratano, CPA for more information at 561-832-9292 Ext. 103 or

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