Estate Planning: Building and Maintaining Your Legacy | Tips From Our Advisors
Estate planning is one of the most important steps you can take to protect your loved ones and make sure your wishes are honored. It’s not just for the wealthy, no matter your net worth, having a plan ensures that your assets are distributed properly, your healthcare wishes are respected, and your family has guidance during a difficult time.
Because circumstances change, estate planning is not a one-time task. It’s an evolving process that should be reviewed regularly and updated when life events occur. Below are some key elements to consider as you create and maintain your estate strategy.
Name a Trusted Executor
An executor is the person legally responsible for carrying out your will, paying debts and taxes, and distributing assets to beneficiaries. Many people choose a spouse, sibling, or child, but you may also consider a close friend or even a professional such as an attorney or financial institution if your estate is complex.
When selecting an executor, look for someone trustworthy, organized, comfortable with financial matters, and respected by your heirs.
Prepare Essential Healthcare Documents
Planning isn’t just about your finances, it’s also about your well-being. Documents such as a living will, power of attorney, and healthcare proxy allow you to express your medical wishes and appoint someone to make decisions if you’re unable to do so.
Review Your Life Insurance Coverage
Life insurance can provide vital financial support for your loved ones. Review your policy regularly to ensure benefits align with your obligations. Keep in mind that costs vary based on age, health, and coverage type, so adjustments may be needed over time.
Write a Letter of Intent
Although not a legal document, a letter of intent can guide your heirs by detailing personal wishes, funeral preferences, and other important instructions. It can also serve as a heartfelt message to your family.
Organize Important Documents
Make sure your executor and loved ones can locate critical records, including your will, trust documents, deeds, life insurance policies, account details, retirement plan information, and a list of debts such as mortgages or loans. Having everything in order smooths the estate administration process.
Communicate With Your Family
Open discussions can help reduce tension later. If you have stepchildren, ex-spouses, or others you want to provide for, consider working with an attorney to structure your plan clearly. The more specific you are, the fewer disputes will arise in probate.
Stay Aware of Taxes
Estate and inheritance tax rules vary by state and can change over time. Consult a financial or tax professional to ensure your estate plan incorporates tax-smart strategies. You can also speak with you advisor for their help or for them to refer you to a trusted source.
Keep Your Strategy Up to Date
A general guideline is to review your estate plan every three to five years, or more frequently if your financial advisor reviews your overall financial plan with you. However, certain life events should always trigger an immediate update, including:
- Marriage or divorce
- Birth or adoption of a child
- Death of a spouse, child, or beneficiary
- Significant change in assets or income
- Moving to a new state or country (laws vary by location)
- Changes in health or medical needs
Estate planning is an ongoing process that evolves as your life, family, and finances change. By creating a plan, updating it regularly, and working with trusted professionals, you can help ensure your loved ones are cared for, your wishes are honored, and your legacy is preserved for future generations.
August is National make a will month