WHY SHARING YOUR ESTATE PLAN IS THE BEST PRESENT TO GIVE THIS HOLIDAY SEASON
2024, we see you.
You’re peeking around the corner, coaxing us to put down the eggnog and start the New Year strong. Well, we’re going to one-up you, not only with exercising but also by completing our estate plans.
Having an estate plan—and keeping it current—is a must, not a wish-we-had. It will most likely spare those you love from having to guess your final wishes and values. Additionally, it will minimize needless burdens on loved ones during an already stressful time, not to mention unnecessary taxes, by sorting it out through the legal system.
It’s the Kindest Gift
While talking about your estate plan might not be as exciting as opening socks or packets of potholders, the holidays are a perfect time to gather loved ones and talk it through. Most family members will be together at some point, and the holidays, despite their busyness, tend to slow when everyone is actually together.
Feeling nervous about broaching the topic of estate planning is natural. Just don’t let it stop you from giving the most loving gift of the season: security and safekeeping for your loved ones.
Tip: During the conversation, encourage other family members to draw up their estate plans too.
Why an Estate Plan Is a Must
Having an estate plan enables you to:
Make the most of your assets. Meeting with qualified professionals helps you grow your wealth over the long term.
Protect family and loved ones. An up-to-date estate plan keeps loved ones safe. Reviewing it regularly means adjusting for changes in personal relationships, tax laws, births, deaths and state of residence.
Be tax smart. Certain assets can be tax burdens (or at least tax surprises) to your family. Planning helps you keep them in the loop and possibly avoid a tax hit altogether.
A thoughtfully created estate plan can also:
include instructions for your care and financial affairs if you become incapacitated before you die.
provide for the transfer of your business at your retirement, disability, incapacity or death.
name a guardian for your minor children’s care and inheritance.
provide for family members with special needs or for loved ones who might be irresponsible with money.
lower the potential for family arguments by eliminating the guesswork about who receives which assets.
Think you don’t have enough to have an estate? Think again.
Estates aren’t defined by the traditional manor homes, multiple cars and many possessions. If you have a car, home, checking or savings accounts, you have an estate. If you have retirement investments or life insurance, of any amount, you have an estate. Even personal possessions, like jewelry, furniture, a prized stamp collection mean you have an estate.
Does Your Plan Include These Common but Important Documents?
Last will and testament
This legal document expresses your wishes about how you want your property distributed after your death. After creating your will, keeping it current should be top of mind. Some situations that may prompt an update include:
Marriage (yours or your child’s or other loved one)
Birth of a child
Passing of a loved one
Financial self-sufficiency of grown children
Changes in tax law
Desire to make a charitable gift
Need to make a change to your will? Your lawyer can create a codicil, which acts like an amendment to your estate plan.
Living will (aka an advance healthcare directive)
This document establishes your wishes for end-of-life treatment if you’re terminally ill. For example, you could state that you do not want to be put on life support.
Trust
A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on your behalf.Traditionally used for minimizing estate taxes, trusts can be arranged in many ways and specify exactly how and when the assets pass to the beneficiaries.
Medical Power of Attorney
Choose someone you trust to make important decisions about your medical care on your behalf if you become incapacitated or otherwise unable to speak up for yourself.
Financial Power of Attorney
Select a trusted individual to manage your finances and property, including paying bills and your mortgage, making bank deposits, collecting insurance benefits and more.
Beneficiary forms
Many assets, such as life insurance, IRAs and 401(k) plans allow you to name a beneficiary and a contingent beneficiary. This helps avoid probate and allows the asset to be paid directly to your loved one.
BONUS: 3 Reminders + Why They Matter
Designate beneficiaries
Naming beneficiaries for important assets like retirement plans or life insurance policies is critical because they pass outside of your will. Without this step, the assets will go to your estate.
Update your plan when life changes
When important events occur, like marriage, divorce or retirement, ask yourself: Will this event influence my plan? If you fail to update your will or beneficiaries, you might accidentally leave an inheritance for someone or something you no longer wish to support.
Share your plan with loved ones
The most successful families talk about their wealth, values and feelings about money, and about their estate planning. If you’re afraid of hurting a loved one’s feelings or making them angry, it’s best to meet your worry head on and address their concerns directly. This article helps you prepare for tough talks with your family.
This hits home: 70% of wealthy families lose their wealth by the next generation. 90% lose it the generation after that. (Gobankingrates)
Working with you on estate planning is one of the most rewarding parts of our job. We can also share tips or go through a script to talk about it with loved ones. To learn more about how we can help, contact us today.
