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Is Your Estate Plan in Order?

Megan Kelly, JD

Director of Financial Education

Last Updated
January 21, 2022

Five Tips for Securing Your Estate Plan

Does planning for the “Great Beyond” give you a case of the heebie jeebies? If the answer is yes, then you certainly aren’t alone. We all put off unpleasant tasks, but I’ve found most clients who commit to answering a few uncomfortable questions leave their estate planning meetings feeling as if a weight has been lifted from their shoulders. Having an estate plan in place is vital to ensuring the long-term security of the things you leave behind – your stuff, your family, your legacy. Is your estate plan complete, secure and in good working order? The following tips can help ensure that it is.

Tip #1 – Create a list of all assets and accounts

A well-thought-out estate plan answers the question of what happens to your property after you’re gone. In order to plan for an effective transfer of assets to your loved ones, it’s important to first have a complete understanding of what you own. Start by making a list of all assets, including bank and investment accounts, insurance policies, retirement accounts, cars, home equity, artwork and other valuables. Then, make a separate list of all debts, including your mortgage balance, auto loans, credit card balances, etc. This will give you an idea of what assets and accounts must be planned for.

Tip #2 – Have the right documents in place

The next step in securing your estate is to execute the appropriate documents. Depending on your situation that may include:

Will – A will is often the first estate planning document that comes to mind and is a document that everyone should have in place. I think of a will like a set of instructions that distributes assets to loved ones according to your wishes. Wills allow you to put restrictions (e.g., age or time-based) on how people inherit and contingencies in place if someone predeceases you. Wills can also help minimize estate taxes and legal challenges to your estate.

Guardianship designations – While many wills include guardianship designations, it’s an important enough element to call out separately. If you don’t formally designate who will care for your children should something happen to you, a court may give custody to a family member you wouldn’t have chosen.

Revocable/Living trust – Revocable trusts, like wills, are a set of instructions describing who should inherit and how. However, unlike a will, revocable trusts offer the advantage of avoiding probate, which can be an expensive and time-consuming legal process. A trust is often a more efficient vehicle to structure tax savings for your heirs.

Durable power of attorney – A durable power of attorney is a legal document that designates an individual to act on your behalf during your life should you become incapacitated and unable to make decisions on your own. Durable powers of attorney can be drafted very broadly so that they cover most any financially related scenario (from opening mail to making investment decisions), or they can be narrowly tailored to a specific situation (closing on a real estate purchase).

Healthcare power of attorney – Similar to a durable power of attorney, a healthcare power of attorney designates an individual to make medical decisions on your behalf during your life should you become incapacitated and unable to do so on your own.

Letter of intent – While not a legally binding document, a letter of intent can be used to inform your executor, beneficiary or the court of your intentions following your death. People sometimes use these letters to express their funeral wishes or to designate how a special asset should be handled.

Tip #3 – Review your beneficiaries

It’s important to review your account beneficiaries on a regular basis to ensure they remain accurate. This is especially important if you have recently experienced a major life event, such as getting married, getting divorced, having a child, losing a spouse, etc.

Tip #4 – Make a plan for digital assets

If you don’t have a plan in place for your digital assets (photos, videos, social media accounts, purchased music, credit card points, etc.), your loved ones may be unable to access them following your death. Your estate plan is a great place to designate who should have access to your digital assets and how to access those assets in a secure manner.

Tip #5 – Revisit your plan on a regular basis

Your life, goals and financial situation evolve and change over time, and so should your estate plan. Revisit your plan on a regular basis to help ensure it continues to meet your needs and provide for your loved ones. Your wealth manager can help identify any changes that should be made as your life progresses.

If you need help ensuring your estate plan is in order, Creative Planning is here for you. Our affiliate, Creative Planning Legal, provides trust and estate planning across the country, with attorneys licensed to practice in a variety of states. Regardless of your specific situation, we can help prepare a custom estate plan to meet your needs. For help with your estate planning, or for any other financial matter, please schedule a call with a member of our team.

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This commentary is provided for general information purposes only and should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

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