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Don't Wait to Get Your Estate Plan in Order

By: American Heritage10.14.21
Blog Dont Wait to Get Your Estate

When should you start thinking about your estate plan? According to many experts, the answer is as soon as you’re an adult. However, only 1 out of 3 adults has taken care of estate planning essentials like creating a will. If you’re not one of them, it’s time to start thinking about your estate plan.

Estate planning is the process of designating who will receive your assets (such as money and property) when you die, as well as how certain responsibilities will be carried out if you die, become incapacitated, or are unable to handle things yourself. You don’t need to be wealthy to need an estate plan.

True, estate planning can seem like a lot of work, since there may be a lot of documents and decisions you’ll need to think about. But you shouldn’t put off this important step. Planning the future of your estate now will be key to ensuring that important financial and non-financial decisions will be taken care of as you intend and help your family avoid confusion, conflict, and extra work as your estate is settled. However, it’s not a “set it and forget it” plan, and you will update it periodically throughout your entire life as your financial situation and priorities evolve.

Let’s go over 7 steps you may need to take when creating your estate plan.


1. Establish a Will

A key piece of your estate planning, your last will and testament defines who will receive your assets like real estate, vehicles, savings and investments, and other valuables. Recipients could include your family and charities you care about. You will also name an executor, a person you trust to carry out the directions in your will. If you have younger children, you can also name someone who would serve as their legal guardian in your absence.


2. Name Your Beneficiaries

When planning your estate, you will need to designate your beneficiaries – the people who will receive any money or valuables from your estate. Assets like accounts, investments, and life insurance death benefits can go directly to the named beneficiaries when the owner dies, which allows them to be transferred without going through probate court. For this reason, it’s important to ensure your beneficiary forms are up to date. Major life events like a divorce or the birth of a child are important times to review beneficiary information. 


3. Designate a Power of Attorney

When you give someone power of attorney over your estate, you give that person the legal authority to act on your behalf in financial or other matters. This person, not necessarily a lawyer, is someone you entrust to manage your affairs if you can’t do so yourself (for example, if you become incapacitated or are out of the country).


4. Create a Living Will

A living will, also known as an advance healthcare directive, is an important way to protect your interests if you become unable to make medical decisions for yourself. This document communicates your decisions about end-of-life care to healthcare professionals and your family.


5. Consider a Living Trust

A living trust is a separate legal entity in which you can hold assets like accounts, real estate, and property. Depending on your estate and the needs of your family, a trust can offer potential tax and planning benefits. While setting up a trust may be more expensive than creating a will, it provides certain advantages, including the ability to simplify the transfer of assets to your heirs by avoiding the probate process. It also offers more privacy because the process doesn’t become public record as it would in probate court.


6. Look at Your Insurance

Many people take this opportunity to assess their life insurance and long-term care insurance. The right coverage could provide greater financial security for your family if they had to cope with a loss of income due to your death or expenses from medical care. Life insurance is particularly important if you have kids or liabilities like a mortgage. Plus, you may wish to have umbrella coverage, which can provide an extra layer of protection to your estate if you face a lawsuit or other claims against you.


7. Gather Documents

Gather all the information and documents your loved ones would need, including:

  • Banking information and online account logins
  • Retirement plans like IRAs and 401(k)s
  • Real estate deeds and vehicle titles
  • Your marriage license
  • Divorce decrees
  • Any paperwork relating to business partnerships


Ensure that this information is in a safe place, such as a safety deposit box or a fireproof safe and that your loved ones know where to find it.


Choose the Right Team

In many cases, you’ll want to work with a team of professionals who can provide the legal and financial guidance you need to navigate this process, including an experienced estate planning attorney. Because your estate plan touches many areas of your financial planning – such as your investment portfolio and life insurance – it’s also a good idea to partner with an experienced financial advisor. Our team at the Investment & Retirement Center (IRC) is here to support you.

Remember, it’s never too early to start planning your estate, and getting everything in order today will help you feel more confident about tomorrow. 



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