Estate Planning Reminders

Regardless of your age, estate planning should be a priority for most individuals. Knowing how your assets will ultimately be distributed offers you peace of mind and helps you to leave an accurate and clear legacy, avoiding confusion over challenging issues that your family and heirs will need to sort out if no such plan exists.

Estate planning can sound daunting, and it may be difficult to know where to start. Here are a few key areas to help you begin the process–or review/update your current plan.

Will provisions and beneficiary designations 

Discuss your will provisions and beneficiary designations with experienced advisers. Together, you can figure out whether they need updating. Review your overall estate plans. Tax laws and other laws relating to property are subject to change, as are circumstances and beneficiaries, so it’s important to keep these potential adjustments in mind. 

How long has it been since you last checked your will?

Are all the beneficiaries and executors whom you’ve named in your will still living? Make sure you name contingent beneficiaries so that your property doesn’t wind up with people you aren’t particularly interested in being associated with your assets. 

Also, make it a point to name alternative executors. Why run the risk that a court might have to name a substitute if your executors die, become disabled, or are no longer willing to serve for another unmentioned reason? 

Update beneficiary designations

Beneficiary designations are included with assets such as insurance policies, IRAs, 401(k)s, 403(b)s, and various other kinds of retirement plans. Make sure you update these details on a consistent basis. Otherwise, the proceeds might wind up with former spouses or others whom you would now consider to be unworthy or unfavorable. Another drawback is that there can be later problems in the event that named beneficiaries have predeceased owners.

Final letter of instructions

Assemble the information for nonbinding documents in a final letter of instructions, which is a known legal term. This type of letter is designed to act as an informal inventory of financial records.

Key parts of said inventory include names, numbers, and locations of insurance policies and bank accounts, information use to prepare tax returns, and various other paperwork. The lists help heirs locate assets and sidestep substantial amounts of otherwise-avoidable administrative expenses, provided the letter remains up to date and accessible. 

Living trusts

For many, it’s worthwhile to consider whether to avail themselves of a living trust. The best way to make an informed decision is to discuss this with an estate planning attorney. 

Also known as grantor or revocable trusts, with these types of trusts, it’s possible to transfer assets in simple and relatively painless ways that avoid some of the headaches of probate. 

Assets channeled into a living trust go directly to the beneficiaries. Thus, those assets bypass what can be lengthy and costly proceedings.

As always, work closely with your R&A advisor who is familiar with your needs and your current circumstances.

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