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Plans to consider

Making money and good investments concept

By Alexis Brown

A majority of American adults die without writing down their most basic desires for what is to happen when they pass on, according to estate planners. I am 29, and the idea of writing a will seemed pointless at this stage, until the birth of my son. He’s been my catalyst for many changes, and thinking of what will happen to him when I die is one of them.

Everyone should make some basic estate plans, regardless of your stage in life. When you put the work in ahead of time, it ensures that whatever life brings, you can influence the outcome, even if you’re not present when decisions need to be acted on. To get started:

Make a list of your financial accounts and whom to contact regarding them.

Gather up any important financial documents. Keep them in a safe and secure spot where someone else knows where they are. In doing so, you will save your survivors the trouble of sifting through endless statements and going on wild goose chases trying to track down accounts that may or may not exist. To that point, update the documents from time to time.  Throw away statements for accounts that you have closed, and add information for new accounts when you open them.

Learn More
Seek professional advice customized to your situation on estate planning. Use this article to help get you started. For further resources, click to read more from the Financial Planning Association and the AARP.

List financial advisors, insurance agents, attorneys, etc. that should be contacted in the event of your passing.  

Review beneficiary designations.

Naming a beneficiary allows the asset to pass outside probate and is typically a much simpler way to pass on an asset. Individuals often list a beneficiary when they open an account and never give it a second thought. For those reasons, beneficiary designations should be revisited on a regular basis – at the very least when you experience a significant life change.

Please click here to read Isabelle Denton’s article on  beneficiaries.

Draft a will.

The goal of a will is to clearly tell your heirs what you would like to happen to your assets when you are gone. It should alleviate some of the difficult decisions that need to be made, since you will not be there to make them. If you do not draft a will, state law can dictate how your assets are divided.

This may seem obvious, but don’t forget to sign your will. Writing your wishes down is not valid in court until you sign and date it.

Put the will in a safe spot, such as a safe deposit box or a fireproof safe, where it isn’t susceptible to natural disasters or any other type of loss. Do not hide your will because if it cannot be found, it cannot be honored.

You can draft your will online, which offers an easy way to get started, but anyone with a sizable estate should seek professional counsel. 

List your belongings and whom you would like to inherit those assets. 

Lay out who gets what before you pass away to avoid disputes among surviving family members. Try to be specific. Don’t rely on the fact that you told your heirs who should have what, because after experiencing a loss of a loved one, people can act irrationally or emotionally, which could cause disagreements.

Select an executor.

An executor administers your estate and oversees all items that need to be addressed. Select someone who not only will carry out your wishes but also can take on such a demanding undertaking.

Think about choosing a family member vs. a non-family member. A family member may have a better understanding of your intentions and how to inventory your assets. For aging spouses who select each other or even mature siblings, this could be asking them to take on too much work. Typically, it is recommended to choose just one person because any settlement paperwork would require each named executor’s signature for every document, which can prove difficult.

Once you have selected an executor, make sure they’re willing to do that for you. If you feel you’re leaving someone out, explain your decision to them as well.

Name a guardian for your minor children.

It may be difficult to imagine someone else raising your children, but this needs to be addressed when you start a family. Here are some helpful questions to ask yourself:

  • Can these people financially handle raising additional children?
  • Do their beliefs and ideals fall in line with yours?
  • Are they prepared and willing to take on that kind of responsibility?
  • Where do they plan on living long term?
  • Do they get along with the rest of your family?
  • Consider their age and if they’re in good health, how old will they be when your children are in high school?

Quick Tip: If you are the custodian of your children’s financial accounts, consider listing the guardian you select as the successor custodian of those accounts.

Designate a Power of Attorney – someone who can speak for you if you should become incapacitated.

All ages are susceptible to life events that could render them incapacitated. Power of Attorney helps provide families with some direction on how to move forward.

Through Power of Attorney, you are choosing someone to make important financial and health-related decisions for you. Select a person that you trust to carry out your wishes as you’ve specified them. Many people select a spouse or an adult child. Tell that person how you would want them to act on your behalf.

I realize planning for when you’re gone is easier said than done, but once your plan is complete you will have created a smoother transition for your loved ones.

Alexis Brown is a registered representative at Landaas & Company.

(initially posted Sept. 23, 2013; updated Jan. 2017)

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