Financial Planner

5 Practical Estate Planning Tips

Planning for what will happen as you approach the end of your life and after you pass away can make it easier for your loved ones to cope. Where indicated, an estate plan can help them avoid much of the probate court processes and fees and also provide instructions for taking care of their minor children. If you haven’t yet created an estate plan, here are some issues to consider.

1. List your Assets

Everything you own is includable in your gross estate. There are some assets that are more vulnerable to unforeseeable events, and some that are more shielded. It is important that you list everything you own and chart out whom you would like to inherit these assets. Whether your goal is to create multi-generational wealth, or you are charitably inclined, having this high-level conversation sooner than later can make a substantial difference.

2. Create a Living Will

You may become unable to make medical decisions for yourself and unable to communicate your wishes to doctors and loved ones. A living will allows you to make your preferences known ahead of time so that others will be able to take actions that reflect your wishes. A living will addresses matters such as whether you want to receive life support, pain medication, blood transfusions, and other forms of care.

3. Granting Power of Attorney/Appointment

Power of Attorney (POA) or appointment gives a person you trust the authority to make financial or medical decisions on your behalf if you become physically or mentally incapacitated. This can also be an effective tool in getting the clock ticking on assets you may not want to leave inside your estate. You can select one person to handle both types of issues, or you can designate multiple agents. 

The individual to whom you grant a financial POA will be authorized to make financial decisions on your behalf and will have access to your accounts. The person you give a medical POA will be authorized to make medical decisions on your behalf.

4. Draft a Will

A will is a legal document that lays out how you want your assets to be divided after your death. If you have minor children, your will can make clear whom you want to be their guardian.

If you pass away and you haven’t created a will, those matters will be decided by a probate judge in accordance with your state’s laws. A judge may make decisions that are not what you would have wanted. Drafting a will can help you ensure that your affairs will be handled in accordance with your wishes after you pass on.

5. Periodically Review and Update Your Estate Plan

Your circumstances will change in the years ahead, so you should review your estate plan every 3-5 years. You may decide to allocate your assets in a different way after the birth of another child or grandchild. You may change your mind about who should be your children’s guardian after your death or the person you initially chose may no longer be able to fulfill that role for some reason. Most importantly, all estate plans are subject to legislative risk, so it is imperative that you keep your plans current with evolving estate law.

Get Help with Estate Planning

Toomey Investment Management, Inc., has a team of professionals who can work together to handle all aspects of your estate planning. Keep in mind that this article represents the basics of estate planning and high net worth individuals with diverse asset bases usually require more intricate planning measures. We can discuss your current situation and your wishes, and connect you with an attorney to draft legal documents that reflect them. Contact us today to learn more.