National Estate Planning Awareness Week is October 15 – 21, 2018. According to the National Association of Estate Planners & Councils, the national awareness week “was adopted in 2008 to help the public understand what estate planning is and why it is such a vital component of financial wellness.”
Do you have a spouse, children or aging parents?
What about investments or retirement savings?
Do you own your home?
If you answered yes to any of these questions, then ask yourself this: Do I have an estate plan in place?
According to the American Bar Association, statistics show that 55% of Americans pass away without a will or estate plan in place. Inadequate planning, loss of mental awareness or the lack of family communication can lead to undesired results when the estate transfer process occurs. Be proactive in your planning, and do not let an unexpected life event be the trigger to put a plan in place.
By taking the time and effort necessary to plan for your estate goals, you should be able to:
1. Provide for your immediate family.
Couples often want to provide for the surviving spouse and children. You can take a burden from your grieving survivors by establishing a will and designating beneficiaries on your transferable accounts (i.e. life insurance, retirement accounts, etc.).
2. Designate guardianship of your children.
If you have children under the age of majority, both you and your spouse should consider adding a clause within each of your wills nominating personal guardians for the children in the event that you both have a common accident. Otherwise, a court will decide, without your input, where your kids will live and who will make important decisions about their finances, education and lifestyle.
3. Distribute property to beneficiaries quickly.
There are often immediate expenses upon the death of a loved one, so timely distribution of your assets can lessen the burden on your survivors. Options include proper beneficiary designations on retirement accounts, life insurance paid directly to beneficiaries, joint tenancy and revocable trusts.
4. Plan for incapacity.
Estate planning is not exclusively meant for after death. You should also consider planning for possible mental or physical incapacity. Living wills and powers of attorney enable you to decide in advance about life support and to pick someone to speak for you legally, medically and financially when you cannot speak for yourself.
5. Administer the estate efficiently.
The executor of your estate is responsible for the distribution of your property and payments of debts and expenses after you have passed. Choosing a trusted executor and giving them the necessary authority to carry out the terms of your will can reduce costs, alleviate the burden on your survivors and simplify administration of your estate.
Estate planning is often a difficult topic to broach. However, when the time comes to implement your estate plan, your survivors will be thankful the plan is in place. It is important to remember that planning is an on-going process. Once your estate plan has been established, it should be reviewed every few years or after major life events to confirm that the parameters are still appropriate.