If you’re wondering if estate planning is right for you, it’s important to know it’s not just for the wealthy. Even people with modest assets need a written plan. And right now is a great time to take the next step and get started.
Estate planning ensures that your money, property, and assets are distributed according to your wishes upon death. An estate plan helps avoid probate and offers more privacy for your heirs than a will (which is public record). It can also provide greater control over your assets, minimize taxes, and speed up the settlement of your estate.
After developing your estate plan, one thing to remember is to not just ‘set it and forget it.’ As your life continues to change, your estate plan should reflect those changes too. Here are a few tips to consider as you start estate planning:
Tip #1: Remember to include a will. Work with a legal professional to create a will that details your wishes regarding the distribution of your property, money, and assets. Estate plans must include a will to help cover assets that may not be included in the estate plan. Your will is also the document to appoint someone to care for minor children or pets. Keep your will updated as your financial and family situations change.
Tip #2: Consider using a trust to preserve valuable assets. A house is an excellent example of something that can be extremely time-consuming and emotionally exhausting to transfer after someone dies. In addition, if you don’t have a trust document, your family may need to go through probate. This court process can become tedious as you attempt to transfer your assets retroactively. Probate can also be expensive and public.
Tip #3: Keep an up-to-date inventory of your assets. You may not realize how valuable your assets are or who may want them when you’re gone. So be sure to list who receives each asset and their approximate value in the estate plan. During the estate planning process, asset information to keep in mind includes homes, land, other real estate, vehicles, boats, and collectibles. In addition, intangible assets to include in an estate plan are items like savings accounts, life insurance policies, retirement plans, ownership in a company, and more.
Tip #4: Establish your directives. A complete estate plan includes legal directives such as a power of attorney, medical care, and trust documents. Who you choose as your power of attorney is a critical decision, so choose wisely and keep your power of attorney document up-to-date if the relationship with that individual(s) changes.
Tip #5: Review your beneficiaries often. Consistently check the beneficiaries listed on your retirement and insurance plans, as these designations can outweigh what is listed in a will. For example, a change in beneficiaries would be necessary due to divorce, the birth of a new child, the loss of a loved one, a marriage, etc.
Tip #6: Work with legal and financial professionals. It’s so important to have financial professionals you trust. Our firm will work together with your legal and tax advisors to ensure your estate plan contains the necessary documents so that the assets you spent a lifetime accumulating transfer to your heirs when it’s time.
Please reach out to our office with any questions you may have. We’d be happy to discuss this with you in greater detail and help you get started on this vital component of your financial plan.