January 6, 2020

The New Year is the perfect time to reflect on the past, determine what you want to change and set a new course of action for success. As one would expect, common New Year’s resolutions include improving diet and exercise; saving more and spending less; learning a new skill or hobby; eliminating smoking habits; and drinking less alcohol.

While all these resolutions are admirable, they’re predictable. For 2020, consider journeying to a place where few have traveled in the world of resolutions and goals: estate planning.

Unfortunately, many people avoid the subject because they associate it with death. While confronting our own mortality can be a hard pill to swallow, try looking at estate planning by associating the idea with life. An estate plan is a vehicle to distribute your assets, but when it comes down to it, it’s not about you at all; it’s about leaving a legacy to breathe life into the people and causes you love.

With that in mind, here are some ways you can confidently get your estate plan in order and conquer one of the most important and rewarding life goals you’ll ever set.

The Foundation's free Estate & Gift Planning Kit has helpful information for individuals beginning to plan their estates.

Starting at Ground Zero

If this is all new to you, you may be asking, “Where do I even start?” Like any goal, the first step is to understand the overall purpose. Estate plans are not one size fits all; they are personal plans that should be customized to your wishes. In beginning to construct your estate plans, put serious thought into:

  1. People: Who do you love?
  2. Assets: What do you have?
  3. Passions: What excites you?
  4. Plans: What are your dreams?
  5. Advisors: Who do you trust?

After you’ve answered these questions, brainstorm ways you can use your assets to help your loved ones and create a legacy to honor the people or causes you care most about. A brainstorm should be exactly what it implies: a storm of thoughts. Think big because “impossible” may be possible once you begin discussing your wishes with estate planning professionals.

An attorney who specializes in the subject can direct you in the decisions you need to make, help you understand what is feasible for your scenario and guide you through the legal documentation process. However, prior to contacting an attorney, an estate ‘roadmap,’ such as the Texas A&M Foundation’s free Estate and Gift Planning Kit, can simplify the legal process and minimize your time at the lawyer’s office. This kit includes helpful information and a workbook to record your family information and estate distribution plans.  

Protect Your Estate from Change

Once your estate plan is built on a solid foundation, it’s important to monitor it in the face of life changes. For instance, an asset could experience substantial growth, or new children or grandchildren could join your family tree. Change could also result from an unfavorable event like divorce or losing a loved one. No matter what the scenario, these types of events can shift your original estate plans in ways that will fail to honor the overall vision of your legacy once you pass away.

The good news? All you need to do is review your plan every few years for complete peace of mind. Consider it preventative maintenance. Proper reviews of your estate plan will ensure your wishes and loved ones are protected from things like unforeseen tax burdens or assets being directed to someone no longer considered a family member, etc.

Know Your Beneficiaries

Some of your most significant assets like life insurance, retirement accounts and annuities will be paid to a designated beneficiary. It’s crucial to not only keep your named beneficiaries updated, but to also understand how receiving this money may possibly cause hardships for them. For instance, if your designated beneficiary is a minor or disabled child, it may be beneficial to set up a trust to avoid costly court proceedings.

Similarly, a solid understanding of how retirement account distributions work will help you make smart decisions in naming beneficiaries. A professional can simplify this process by teaching you how different beneficiary designations will impact the size, frequency and income tax payable on distributions.  

And, don’t forget: It is extremely important to review beneficiaries on an annual basis to update as life evolves. Even if your will is up to date and includes this information, beneficiary designations associated with these accounts supersede wishes left in your will.

The Value of Health Care Documents

For those of you who have a health-oriented New Year’s goal in mind, here’s one with a twist: Resolve to create health care documents to ensure you have full control over medical decisions made while you’re alive.

As mentioned earlier, most estate planning really has nothing to do with you because its purpose is to manage assets you will leave behind. Health care documentation is an exception.

It’s unpleasant to think about being physically incapacitated to the point where we can’t make our own health decisions, but unfortunately, it’s not uncommon. Not knowing what cards life may deal you, formal health care documentation like health care proxies, HIPPA authorizations and living wills see to it that your wishes are honored, while removing the heavy burden from your loved ones of making tough decisions in an emotional state.       

The Decision is Yours

Like any New Year’s resolution, the decision to follow through is yours. Life goals have major obstacles, which is why they are goals: They aren’t easy. To combat estate planning obstacles, we must first shift our mindset from death to life. Conquering this goal gives you the power to have complete control over your assets. It’s not about leaving this world; it’s about leaving a legacy so others can celebrate your life through living out your wishes.

If Texas A&M University is one of your passions, our experienced planned giving team would love the opportunity to discuss your legacy goals and how we can tailor a gift that fits your needs. For more information, contact Angela Throne ’03 at athrone@txamfoundation.com or (979) 845-5638.