Does Your Estate Plan Cover Emerging 21st Century Conditions?
BMO Harris Retirement report points to new conditions which impact estate planning:
-- Will your heirs know about your digital intangible assets and how to access them?
-- Seven in ten caregivers are providing some kind of financial assistance to their parents or aging relatives. Who will care for them if something happens to you?
-- Only seven percent have made a formal arrangement for their pet in their estate planning documents. Who will care for them and pay for their expenses?
SARASOTA, Fla., June 29, 2012 /PRNewswire/ -- The accumulation of digital assets, growing need for elder care and changing status of pets in our lives are three emerging factors that are often overlooked in the 21st Century estate planning process, explained Jack R. Kuhn , CFP®, Senior Vice President and Regional Manager of M&I Wealth Management, a part of BMO Financial Group, in Fla.
According to Kuhn, a recent report issued by the BMO Retirement Institute advises individuals and their professional advisors to take a closer look at three emerging trends unique to our times and suggests ways to incorporate them into estate planning for the future.
"First of all, the whole concept of digital assets and estate planning can get confusing. Think of it like this: If something happens to you, and by confidential design, nobody knows your passwords, how do your password-protected electronically accessed financial accounts get discovered and distributed to your heirs or beneficiaries?
"Secondly, as Baby Boomers, my wife and I actually found ourselves in the 'sandwich generation,' raising our kids while also taking care of my parents," added Kuhn. "Chances are, you might find yourself in the same situation. Make certain your plans include the possibility that you could meet with an untimely death. Who would take care of your parents then?
"Finally, be careful with planning for your pet's care after you're gone. If you have a couple of man's best friends that are not spayed or neutered, what happens if your estate plan designated pet caregiver breeds them to keep their fees and/or cash flow coming in for multiple generations of puppies? Think about that. It's happened, so be specific in your instructions."
Kuhn noted that when planning for tomorrow, individuals and their advisors can't expect to meet the challenges of today with yesterday's tools. To keep up with these new realities, estate planning needs to evolve and include these three emerging estate planning issues:
The accumulation of digital assets
Look beyond tangible, physical assets and make provisions for intangible assets. Boomers are wired into the digital world and should not leave their next of kin frustrated and scrambling to access online finances. The report notes that many Boomers have given little thought to their "digital estates." More than half of survey respondents aged 45 and over with digital property believe it is very or somewhat important to put contingencies in place for their personal and financial digital assets, yet the majority (57%) of these individuals have not made such provisions in their formal estate plans.
The growing need for elder care
As lifespans lengthen, everyone should ensure that the loved ones they care for will be comfortable in the event that they are no longer able to look after them. The report recognizes that caregivers who provide financial assistance to a relative living in his or her own home may face higher costs than those who share accommodations with the older relative. Interestingly, the majority of parents for whom Boomers are providing care and support happen to live in their own homes. Therefore, it is important to consider the cost of hiring a personal care worker to replace the care previously provided by the family member in this situation.
The changing status of pets in our lives
As pets are increasingly considered "members of the family," pet owners should also be considering their pet's needs in the event of their death or incapacity. It is predicted that pet-related spending will continue to increase rapidly over the coming years, due in large part to the aging pet population, and because owners will seek higher-quality food for their pets. The report suggests that one should consider leaving a reasonable amount of money to assist the pet caregiver. Making this provision and providing financial assistance to offset the rising costs of pet ownership can help minimize the risk of the pet being abandoned and given to an animal shelter.
Individuals and professionals should review estate plans in these areas to ensure that plans are current and up-to-date. The minimum that can be done is to clearly express wishes and intent in writing.
To view a copy of the full report or for more information about the BMO Retirement Institute please visit: www.harrisbank.com/retirementinstitute
Contact: Jackie Slatkow or Jennifer Jones
Slatkow & Husak Public Relations
Jackie@Slatkowhusak.com or (561) 278-0850
Carey Allen (480) 558-6383
SOURCE Harris Private Bank a part of BMO Financial Group
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