Estate Planning Strategies
- Everyone could use an estate plan – not just the wealthy.
- 5 documents are essential for many estate plans.
- An estate planning attorney and your accountant will work with your Financial Advisor
Estate planning: a matter of control
Consider your assets: bank accounts, investment accounts, 401(k) or 403(b) plan accounts, house, cars, jewelry, and heirlooms. This is your estate and your estate plan can define what you would like to happen to these assets when you die.
An estate plan can also take care of you as you get older or if you become ill or incapacitated. Being wealthy has little to do with it.
If you don’t make your own plan, your family may be left scrambling at an already difficult time. Bottom line: If you don’t decide, someone will decide for you.
Five essential documents
Instructions for distributing your assets when you die. You will name a personal representative (executor) to pay final expenses and taxes and distribute remaining assets. Name a guardian to raise your minor children if both parents die.
You give a trusted individual management power over your assets if you can’t manage them yourself. This document is effective only while you’re alive.
You choose someone to make medical decisions on your behalf if something were to happen and you can’t make them yourself.
Shares your intentions about life-sustaining medical measures if you are terminally ill. No one is given authority to speak for you.
You can provide for continued management of your financial matters while you are alive, after your death, and even for generations after.
Instructions for distributing your assets when you die. You will name a personal representative (executor) to pay final expenses and taxes and distribute remaining assets. Name a guardian to raise your minor children if both parents die.
You give a trusted individual management power over your assets if you can’t manage them yourself. This document is effective only while you’re alive.
You choose someone to make medical decisions on your behalf if something were to happen and you can’t make them yourself.
Shares your intentions about life-sustaining medical measures if you are terminally ill. No one is given authority to speak for you.
You can provide for continued management of your financial matters while you are alive, after your death, and even for generations after.
Why beneficiary designations are important
Beneficiary designations can be an easy way to transfer an account or insurance policy when you die. But if you didn’t complete beneficiary designations, or haven’t updated them, they can cause issues with your estate plan.
Designations on forms are often filled out without much thought – but they’re important and deserve your attention. Beneficiary designations on forms like your insurance policy and 401(k) take priority over other estate planning documents, like your will or trust.
Let’s say you specify in your will you want everything to go to your spouse after your death. But you never changed the beneficiary designation on your life insurance policy, and it names your ex-spouse. Your ex may end up getting the proceeds.
Turn to a team of professionals
Making the decisions involved with estate planning may seem overwhelming. It doesn’t have to be. You can start by organizing your important documents.
Turn to a team of trusted professionals, including your financial advisor, an estate planning attorney, and your accountant. They know the questions to ask and can help you avoid potential pitfalls.
If you currently don’t have relationships with an attorney and an accountant, we can make some recommendations. We can also discuss our role in the planning process and how you can get started.
Next steps in Estate Planning
- Make an appointment with us to talk about your estate planning goals.
- Start gathering your financial documents.
- Check the beneficiary designations on your financial and investment accounts.
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