~ Online Banking Login:

Eight Simple Estate Planning Steps

The following steps highlight the most important areas for consideration when planning your estate.  While no one likes to think about the inevitable, planning your estate provides considerable peace of mind for both you and your loved ones knowing your plans are in place and will be carried out according to your wishes. 

1.  Family communication

In many families, death and money are almost forbidden subjects.  Yet some frank discussions with children (or parents) can help everyone be prepared for the unexpected.  At a minimum, key family members should know the whereabouts of important documents and be aware of any medical treatment options you want or don’t want. 

2.  Your will

This legal document dictates how your assets are distributed from your estate and can be used to designate legal guardians for dependents.  These are decisions you, not the courts, should make.  The person named in your will as executor of your estate will oversee the estate until all assets are distributed and the estate officially ceases.  Choose someone that is capable of understanding and carrying out your wishes.  

3.  Your retirement accounts

You should carefully choose the beneficiary of any retirement plan you have, including IRAs.  In most cases, the person who will get the assets in your retirement account is the determined by the beneficiary form you sign and not your will. 

4.  Irrevocable life insurance trusts

When you hear that life insurance proceeds are tax-free, it is only referring to income taxes.  If your estate is the beneficiary of a life insurance policy, the proceeds of that policy are included in your taxable estate.  In many cases, those proceeds are what increase the size to the point where estate taxes are due.  By having your life insurance policy owned by a life insurance trust, you can keep the death proceeds out of your taxable estate and potentially reduce any estate taxes that may be due. 

5.  Durable power of attorney for finances

This document gives another person the ability to make financial decisions for you if you become incapacitated and unable to make your own decisions.  If this power of attorney is invoked, that person can access your accounts, pay bills, write checks and handle your investments without going to court to get approval for transactions.

 In this power of attorney, you should choose someone that is capable and knowledgeable enough to make decisions on your behalf.  It may be an adult child, sibling or trusted friend.  If you don’t have someone like that, you may want to designate your attorney or accountant. 

6.  Medical directives

These documents direct how health care decisions are to be made if you are not capable of making them yourself.  A durable power of attorney for health care gives another person the ability to make medical decisions and a living will tells your family and medical personnel how you are to be treated if you become terminally ill.  It also states your wishes about being placed on life support.  Some states may require two forms. 

7.  Regular estate planning check-ups

Estate plans should be reviewed on a regular basis.  Many estate attorneys suggest a review every three or four years.  If your situation changes (divorce, death of a spouse, birth of children or grandchildren, changes in wealth status), you may want to review your plan more often.  In addition, if you move to another state, be sure to get an estate plan review. 

8.  Use an expert

The estate laws are complex and the consequences of being inadequately prepared are significant.  While you may want to do some investigation on your own, using a qualified professionals for your estate planning needs is a good idea. 

Not sure where to begin? Our Trust professionals are a great resource to help you get started. Our experts will work with you and your professional advisors to help you create and manage your estate plan…your legacy!  Call, stop by, or email us today to get started.