The 6 Essential Elements of a Good Estate Plan
Many people put off estate planning because it can be uncomfortable to talk about. While the the COVID-19 pandemic spurred many people who hadn’t made a will to finally take action, according to Legal Zoom, a majority of Americans still haven’t completed their estate plans.
We encourage you to push past your discomfort to get a plan in place. Allowing someone else to make decisions for you is worse than a few minutes of awkwardness talking about what happens to your estate after you pass, and that’s what will happen without an estate plan.
Getting your estate in order is a fairly simple process. You can use our step-by-step guide to gather all the documents and information you need to create an estate plan. Here is what you will need to address.
1. A Will
Your will is the most basic element of your estate plan. This legal document lays out information such as:
· Who gets your property when you pass.
· Who receives custody of your dependent children and/or pets.
· Who distributes your estate.
Probate courts decide these things for people who don’t have a will, usually giving everything to your children, if you have any. The most important thing to remember is that estate planning encompasses more than just writing a will.
2. Beneficiaries Update
Aside from your will, you also have outside accounts with designated beneficiaries who will benefit when you die, regardless of what you have in your will. Make sure you have updated beneficiaries for:
· Life insurance policies.
· Annuities.
· Qualified retirement accounts.
Review your account beneficiaries every year to ensure they stay up to date, as deaths, births or divorces may impact your decisions.
3. Transfer-on-Death Agreements
Similar to beneficiaries, your brokerage accounts may have a system that transfers assets upon your passing. Talk to your brokerage about setting this up.
4. Living Will
A living will includes your end-of-life-care wishes. Physicians consult the document to determine what to do if you are unable to communicate what you want. It may include, for example, a DNR (do not resuscitate) order if you do not wish for CPR to be performed if you stop breathing. It can also address whether you want life support continued.
5. Power of Attorney
Power of attorney appoints someone to make decisions for you if you become unable to do it yourself. You should pick someone you trust and who will put your own interests ahead of theirs when POA is invoked. If you don’t have someone selected for power of attorney, a court can do it for you, though that pick may not match your preference.
6. Trust
Not everyone needs to set up a trust in their will, but if you have children who are still minors or who will require long-term assistance, then the trust can retain the property or money you leave, and a trustee will control access to it for as long as necessary.
Still feel overwhelmed at the thought of estate planning? Contact Jay at Go Comprehensive to discuss your options. He can walk you through the process and ensure you are making the right retirement plans, too.
