Family tragedies don’t occur according to our own personal timetables. That’s one reason why estate planning should not be put off. The process begins when we become adults and continues throughout life.
“The first thing people with younger children need to think about is who they want to name as guardian in case something happens to both of them or if they are incapacitated,” says Leslie DiPietro, founding attorney at DiPietro Law LLC, estate planners in Millsboro. “With older people, they need to institute power of attorney to someone in case they become incapacitated.” That also helps lessen the burden on family members.
Estate planners in Delaware agree that the earlier, the better, as delaying the process can lead to unintended negative consequences. Plans should also be reviewed whenever there are significant life changes, such as births, deaths, or divorces. (Although it is legal to do estate planning by yourself, our experts recommend hiring a professional to cover all the nuances.)
Writing a will is usually the first step, but other important instruments are also needed, says Charles Durante, a partner in Wilmington’s Connolly Gallagher LLP. “Not only does everyone need a will, but since disability often precedes death, one should have two powers of attorney—one for health care, the other for financial matters.”
Financial trusts, whether or not they are part of a will, have many advantages, he notes. “Whereas a will is filed on the public record, a trust document is not, and privacy can be critical for family harmony and other reasons. A trust may also provide important flexibility where assets are to be distributed over years or generations,” he adds. “And in Delaware, trusts provide an additional advantage. Property held in a trust at death is not subject to probate or the 2% probate fee that is imposed on property administered by the executor.”
Probate is a court-supervised process that involves making sure a will is valid, pays outstanding debts, and transfers the remaining property to the deceased’s heirs. “In Delaware, probate is required for solely held property,” explains Brian Brittingham, partner at the Schmittinger & Rodriguez law firm in Dover. “It’s not the scary beast that it’s often painted to be. In most cases, it can be a helpful and economical process.”
But people often get into difficulties trying to avoid probate with homemade plans, DiPietro warns. “Major assets may end up going directly to someone, and there may not be enough assets to take care of estate debts, and someone else may be left holding the bag.”
Whether an estate plan is made with or without professional assistance, “it should be reviewed whenever there is a major change in your life or family status,” Brittingham echoes. “But having an annual review may be a bit of overkill.”
Finally, Durante strongly advises transparency with potential beneficiaries. “A common mistake is not informing beneficiaries about your intentions, particularly when assets are not being left to children in equal shares, which, for example, may be the case if one child is a caregiver or is active in the family business.” There should also be clarity about who should be the estate executor, whether a family member, a friend, or a professional estate planner.
In short, careful estate planning should not only involve passing on assets but also preserving family harmony.
Related: Home Reassessments in Delaware: What You Should Know
