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Planning for the Unexpected: 7 Estate Planning Tips


Posted on Tuesday, October 15, 2024 in Financial Education

People of all ages have many misconceptions about estate planning. Lots of people think that estate planning is solely for older individuals, while even more people think estate planning is a process that is impossible to understand.

The truth is that estate planning is for people of all ages. Once you have assets to pass on, it’s important to have an estate plan to ensure your wishes are fulfilled. And while estate planning can be complicated at times, with a little knowledge and assistance from an estate planning attorney and/or a financial advisor, your estate plan can be put in place to ensure your loved ones are cared for following your passing. Here are seven estate planning tips to help you plan for the unexpected.

1. Take an inventory of your assets.

In order to designate where you’d like your assets to go, you must first determine what assets you have. Start by listing your assets, both tangible and intangible.

  • Tangible Assets: Residential and commercial real estate, vehicles, campers, boats, collectibles, antiques.
  • Intangible Assets: Checking and savings accounts, certificates of deposit, health savings accounts, life insurance policies, retirement plans such as IRAs or 401(k)s, and other investments.

Once you’ve completed your list of assets, start considering how you’d like them to be dispersed to your loved ones, charities, and other parties.

2. Consider the needs of your family following your death.

As you’re considering how to divide your estate, also consider the unique needs your family members may have after your passing. If you’re considering leaving money or property to someone who has a disability, who is a minor, and who may need assistance managing their money, you may want to make special stipulations for their portion of their inheritance. Work with an estate planning attorney to determine which solutions work for your family and put those solutions in place with your attorney’s assistance.

Planning for the Unexpected: 7 Estate Planning Tips

3. Write a last will and testament.

When people think of estate planning, they often think about writing their last will and testament. This is a good place to start, as a will specifies the individuals that will inherit the estate.

Your will can be as simple or as complicated as you like. You can divide your estate into percentages given to individuals or entities, or you can designate specific items or monetary bequests to family members, friends, or charities. Work with an estate planning attorney or financial advisor to determine which option is right for you.

4. Designate a guardian for your children.

In your will, you should designate a guardian and contingent guardian for your minor children. If you have pets, you can also specify their guardian in your last will and testament. You can also put in place a separate document, called a guardianship designation, to specify your children’s intended guardian(s).

5. Put in place other necessary documents.

Depending on your circumstances, your estate plan may require more than just a last will and testament. Work with an attorney to determine whether you need to have the following documents drafted or whether you need to reevaluate your current versions of the following documents:

  • Advance directive or health care power of attorney
  • Financial power of attorney
  • Review titles and property deeds
  • Insurance policies
  • Revocable and/or irrevocable trust agreements
  • Guardianship designations

6. Ensure your executor has access to all the documents needed to carry out your wishes.

The executor of your will must have access to many financial and estate planning documents to fulfill your wishes after your passing. Consider adding your executor to your safety deposit box’s lease at the bank so they have access to your documents after your passing. If you store your documents in a safe at home, ensure they know the combination or have a copy of the key so that they can access the safe in an emergency.

7. Check in on your estate plan as you reach milestones in your life.

As you reach milestones in your life, continue to reevaluate your estate plan and change it as needed. Here are some instances where you may want to make changes to your estate plan:

  • When you turn 18. Designate who will make legal, health or financial decisions for you if you can’t.
  • When your purchase real estate. Determine how the asset will be handled upon your death, whether it be through will or trust.
  • When opening an investment account. Designate beneficiaries and determine whether they’re old enough to receive an inheritance. If not, consider using a will, trust, or other beneficiary designation.
  • When your family tree changes. Determine who will inherit your assets, who will care for your children, and who will support your surviving spouse if something were to happen to you.
  • When you retire. Identify how you’ll transition from accumulating wealth to using those assets. Determine whether you have enough money to retire comfortably. Also consider who will take care of your surviving spouse in the event of your death.
  • When you move into senior living. Choose where you want to live, whether it be senior living or long-term care, and determine how you’ll pay your bills, manage your finances, and make health decisions. Also decide who will make these decisions if you’re unable to.
  • When you want to give charitably. Work with your estate planning attorney and financial advisor to choose a plan that allows you to give the most efficiently to those you care about the most.

Estate planning can be an intimidating process, but with a little time and care you can ensure your wishes are fulfilled following your passing. For more information about estate planning or to visit with a financial advisor, visited United Bank & Trust’s website or call us at (641) 753-5900.

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