Estate planning is a crucial tool in your arsenal for securing your family’s financial future. It involves more than just distributing your wealth – it’s also about protecting your assets, loved ones, and legacy. Creating a comprehensive estate plan allows you to ensure your assets are distributed according to your wishes, establish healthcare and funeral directives, protect minor children, and help you leave a legacy for your loved ones.

While estate planning might not be the most exciting task on your to-do list, it should rank at the top in terms of importance. In this article, we’ll outline the dos and don’ts of estate planning to ensure your finances and family are protected.

Dos of Estate Planning

Estate planning can feel overwhelming, especially when you’re just beginning the process. The most important “do” is to work with an estate planner, attorney, or financial advisor. There are many legal components of estate planning, and you want to ensure you have all your financial ducks in a row.

Here are other components you “do” want to include in your estate plan:

• Create a Will: A Last Will is a legal document that outlines how your assets should be distributed upon your death. If you have dependent children, you can assign a guardian to care for them in your absence.
• Outline Healthcare Directives: A Living Will allows you to describe your wishes toward medical care if you are unable to make those decisions for yourself.
• Appoint a Power of Attorney: A Power of Attorney (POA) allows you to designate a trusted individual to make financial, legal, and medical decisions on your behalf if you become incapacitated.

You can appoint a Financial Power of Attorney so your designated individual can access your financial accounts, help you pay your bills, and manage your money. You can separately appoint a Healthcare Power of Attorney to allow your designated individual to speak with medical professionals, access your medical records, and make decisions for you. If desired, you can appoint different people to be designated on your Financial POA and Healthcare POA.

• Review Life Insurance Coverage: Several factors affect your policies, including age, health, location, family members, etc. Review your policies to make sure you have the proper coverage desired.
• Update Beneficiary Designations: Review the beneficiaries listed on your insurance policies, financial accounts, and retirement plans. Update any designations as needed to reflect your current wishes. Make it a habit to check your beneficiaries on an annual basis. Life events, such as divorce, marriage, child or grandchild births, etc., can all impact your beneficiary listings.  
• Create Lists of Debts & Assets: Providing your heirs with a list of your accounts will significantly simplify their life. Be sure to include account numbers and the name of either the financial institution or company of each debt or asset.
• Consolidate Accounts: Consider consolidating any “stray” accounts and moving those funds into your primary accounts. This step will simplify your financial life, shorten your list of accounts, and make things much easier for the heirs managing your accounts. Plus, there will be fewer statements to sift through, less paperwork to manage, and fewer fees.
• Choose a Reliable Executor: Select someone you trust to execute all directives you outline in your estate plan. This person will be responsible for executing your will upon your death and will receive copies of your will, powers of attorney, trusts, and other important documents and information.

Don’ts of Estate Planning

One of the greatest misconceptions about estate planning is that only the wealthy need them. Everyone should have an estate plan, especially parents with young children. Here are several steps you want to avoid during the process:

• Procrastinate: Nothing good will come from putting off your estate planning, especially as you continue to age. We never know what could happen, so it’s crucial to act sooner rather than later. Tomorrow is never promised, so get started on your planning today!
• Do Everything Yourself: Trying to do everything on your own will be overwhelming. Plus, any documents that contain errors or are incomplete can create problems for your heirs. Ask your family members to help you, and don’t be afraid to hire professionals for help and guidance.
• Keep Secrets: Keeping everything to yourself not only places a huge burden on you, but it can also harbor tension, confusion, and distrust among your loved ones. Although these conversations can be difficult, you need to let your loved ones in. Let them know what’s going on and discuss your plans and intentions.
• Overlook Digital Assets: Don’t forget to include your digital assets on your list of accounts! This includes cryptocurrencies, digital files, cloud storage, email accounts, social media accounts, login credentials, and more.
• Neglect Updating Your Plan: You don’t need to update your plan as frequently as every month or even every year, but it is essential to review your plan after major life events like marriage, divorce, the birth of children or grandchildren, adoption, or the acquisition of new assets.
• Fall for Elder Abuse: Maintaining a comprehensive estate plan can help prevent elder abuse by appointing designated individuals to manage your finances. This step makes you less likely to become a victim of financial abuse. It protects you from emotional manipulation by making it harder for anyone to threaten or convince you to give up your assets or leave more to them than you desire.
• Foster Family Conflict: When multiple siblings are involved, it often plays out that one sibling carries the brunt of things and winds up doing all the work. Have a conversation among the siblings and decide if there will be one who takes the lead. Choosing the roles of each person ahead of time ensures everyone is on the same page and can help mitigate conflict.

We’re Here to Help!

Creating a comprehensive estate plan is one of the most generous things you can do for your loved ones. By following the dos and don’ts of estate planning, you can ensure that your wishes are honored. It’s never too early to start planning. Taking a proactive approach provides peace of mind for you and your loved ones and safeguards your family’s financial future.

We understand the importance of comprehensive financial planning and are here to support you every step of the way. Learn more about our partnership with Trust & Will and how you can secure your family’s future with an estate plan.