ANCHORAGE (KTUU) - What's going to happen to your assets after you die? Your parents die? Your spouse dies? It's a conversation that's uncomfortable to have, but one that's extremely important.
Estate planning is any decision that you make that controls what happens to your property if you either pass away, or become incapacitated. Estate planning lawyer Chelsea Riekkola says there are some things to keep in mind when planning.
"Do make sure you know how all of your assets are titled as far as making sure that bank accounts, if they're joint with a spouse or with a kid, make sure that's intentional," said Riekkola. "Make sure you know who else's name is on your stuff. Do also make sure that if you have an estate plan, you let the people that you love know that you have one, and maybe tell them where it is and how to get it if they need to."
Wednesday, Riekkola spoke on the topic to the Anchorage Chamber of Commerce's Chamber Academy. Her talk covered many points: things to keep in mind, things to watch out for, and how different types of assets work once someone passes away or becomes incapacitated.
Riekkola says roughly 50 percent of people don't make a plan, and that's something she says is one of the biggest "don'ts" to estate planning. If you don't have one, she says the state of Alaska will designate your assets, which can get complicated, and is often not what the person intended to happen.
Estate planning dos and don'ts
"If you have a blended family, and some of the children of one spouse are not the children of the other spouse, then there's a statutory formula that depends on how many kids there are and who's kids survived and based on that family structure, different people get different percentages after certain amounts of money, so it is quite complicated."
Also, while the conversation may be uncomfortable, she says it's important to let your family know your plans, so there are no surprises after you pass. It's also important to have the conversation about your healthcare directive.
"Nobody wants to talk about, 'hey if I get hit by a bus, and they're keeping me in a coma in the hospital to let my brain heal,' who do you want to be in charge of healthcare decisions," Riekkola said. "Let's say the bus hit you a little harder, and you're in a permanent coma. What decisions do you want made at that point? You have the option to make those decisions ahead of time without ever seeing the bus, and that way, that takes that burden off of your loved ones."
She also says don't assume that your will controls all of your assets, because in fact, a lot of the assets people have in their portfolio wouldn't be controlled by a will at all -- things like joint bank accounts, a life insurance policy, or retirement accounts. That's also why it's important to update your beneficiary forms throughout life changing events such as having additional children, or grandchildren, or as family members pass away.
"It has such potential to create family drama. If one kid is getting a $400,000 check, that the other children believe should have passed to them in equal shares, that has the potential to break some relationships," said Reikkola. "Additionally, the child who receives the check might decide, 'well, I don't actually want to keep this money, I want to distribute it to my siblings, but then they have to tick some legal boxes, maybe there's some tax implications that could go along with that that could be problematic."
Estate planning can be costly. For those who may not be able to afford it, there are resources available through organizations like the Alaska Legal Services Corporation. More information on the probate process, and estate planning can be found on the Alaska Court System's website.
Copyright 2019 KTUU. All rights reserved.