Estate Planning

Estate planning is a topic that most of us would like to completely avoid addressing. Less than half of Americans have a will or other basic estate planning documents in place.

Everyone needs a basic estate plan, and it’s also important to recognize that an effective estate plan is about more than just leaving behind a legacy to others. Here are a few estate planning steps you can take to help get you started:

  1. Establish meaningful goals that matter to you and your loved ones. One way to help give your estate plan more purpose and meaning is to address the following questions:
    – Are you concerned about choosing an executor or a guardian for your children?
    – Do you have any charitable giving plans?
    – Are you concerned about finding ways to avoid the time and expense of probate?
    – Do you have important family values or stories that you want to pass along through an "ethical will" or "legacy letter"?
    After identifying what matters the most to you, schedule a time to take action and make sure you have a basic estate plan in place.
  2. Get your financial documents organized. First, try to locate important retirement account information for 401(k) plans, IRAs, brokerage accounts, etc. Then, make sure you have account information for bank accounts. Take time to consolidate life insurance policy information and any old estate planning documents such as wills, trusts, powers of attorney or living wills that you haven’t reviewed recently. It’s also important to keep a list of online account passwords and digital assets in a convenient location.
  3. Evaluate your overall financial wellness. Start by completing a net worth statement (click here to download a net worth statement worksheet) that includes a list of your assets and liabilities. This step also involves reviewing your life insurance to ensure it covers your family’s potential needs for income, future education expenses and the costs of settling an estate.

Once your estate plan is set, take some time to consider the beneficiary designations, share those plans with everyone and update it as major life events occur.

This post was derived from Financial Finesse’s retirement expert, Scott Span.

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