Did you know that the Covid-19 pandemic increased the overall U.S. awareness of the need to have a will, living trust, or other similar end-of-life document, prepared? According to an August 2022 survey from Caring.com (senior living referral service):
- 50% think estate planning is somewhat important
- 33% have these plans in place
- 67% are leaving what happens to their assets in the case of death or disability up to others, which includes the state
When you need a plan due to an event that activates your desire to protect your family and assets, it’s essential to have a comprehensive plan.
The process of creating an estate plan can be complex and time-consuming. That’s why you should find and rely on an experienced financial advisor in Bountiful, UT, who can take on this delicate task with you and for you. At Advanced Retirement Strategies (ARS), we are here to walk you through these steps to protect you and your family:
- Review your estate planning goals
- Obtain a financial snapshot
- Create your plan
- Talk to your heirs
- Review and revise your plan
- Update beneficiary designations and titles on property
What is estate planning?
How you want your assets handled and distributed after you pass should be honored. This includes everything you own: your home(s), vehicle(s), real estate, life insurance policy, savings and checking accounts, investments, personal possessions, etc. An estate plan helps to ensure your wishes are upheld at all costs.
This article will show you how to create an estate plan and what you need to make that happen.
1. Review your estate planning goals
In getting started, make the time to sit down and assess your estate goals. In other words, why do you want one? Some people want to ensure their loved ones are provided for after they die, while others may want to make a charitable donation or leave a legacy behind.
Next, find out what kind of assets you own, how much money they’re worth, and how you might want them distributed among family members. ARS can help you calculate your net worth and estimate the value of any estates you currently own to get the ball rolling.
2. Obtain a financial snapshot
In reviewing your current financial situation, take an honest look at what assets you have, what debts you have, and how much money flows in and out of your paycheck each month. It’s also essential to assess whether or not there are any significant expenses, like college tuition payments or retirement savings coming down the line.
You shouldn’t focus solely on numbers either; it’s equally important to consider how comfortable or uncomfortable you feel about these numbers (your “comfort level”).
3. Create your estate plan
All legal documents that detail your wishes for how you want your property and assets to be distributed upon your passing should be treated like gold. Of course, you can make a will yourself but do you have the time and resources? Working with a financial advisory firm with legal partners on the team that can craft these items for you:
- Instructions for your personal care and financial affairs in the event of incapacitation before you pass
- Arrangements for disability income insurance, long-term care insurance, or life insurance
- Transfer of your business (if applicable)
- Appoint a guardian for your minor children’s inheritance and care
- Arrange financial support for family members with special needs without disqualifying them from benefits from the government
- Provide for loved ones who might not be financially responsible
- Minimize court costs, taxes, and legal fees, which may include completing or updating beneficiary designations, funding assets into a living trust, or aligning your assets with your plan
- Update beneficiary designations on mutual funds, annuities and qualified retirement plans such as 401(k)s
Safeguarding your documents is part of this process. For 30+ years ARS remains a trustworthy financial ally to help clients like you successfully turn the page into a new life chapter.
4. Review and revise your plan
How often should you review your estate plan? Estate planning is not a one time event – it’s an ongoing process.
As a rule of thumb, you should review your estate plan at least once every three to five years, but more frequently if and when you experience major life changes. These are common events that would call for a review and possible revision:
- Getting married or divorced
- Have children and stepchildren
- Buy or sell real estate or another property that may affect your estate plan
- If there are changes to your financial situation (such as retirement or inheritance)
- If any new laws come into effect that would impact how assets are distributed upon death (such as the federal estate tax exemptions).
5. Update beneficiary designations and titles on property
Beneficiary designations are crucial for the smooth transfer of assets after you pass away, but they are not always the same as titles.
For example, when a joint account is opened, you might give your spouse full rights to withdraw from it at any time without providing notice or obtaining permission from anyone else who has an interest in it (the co-owner). However, if your will instructs that all funds in this account be transferred to one specific child upon your death, then only that child would have title over those funds once you were gone.
Beneficiary designations should be updated regularly by both spouses so as not to overlook something important—like adding another beneficiary or changing who receives what piece of property—and kept securely somewhere other than where they’re currently sitting (in case they’re destroyed). This ensures that there won’t be any legal issues surrounding their validity after someone dies unexpectedly because all necessary paperwork was already taken care of before tragedy struck.
6. Talk to your heirs
It’s vital to ensure your loved ones understand the decisions you’ve made and are familiar with administering your estate. This is especially true if they are not financially savvy and, therefore, may be confused by the intricacies of estate planning. If possible, ask an experienced family law attorney to meet with them in person or on video call so that they can explain everything from beginning to end.
Suppose there is doubt about whether your heirs will be able to manage the responsibility of administering your estate when it comes time for them to do so. In that case, consider appointing a trusted friend or family member who has experience working as an executor (the person who oversees an estate).
It’s also crucial for you as a parent or grandparent to ensure that each heir understands their role. This includes how they can access information about their inherited assets from different accounts and investment vehicles such as IRAs, 401(k)s, mutual funds, and investment accounts.
Estate planning doesn’t have to be complicated.
Keep the task of estate planning on the simple side of things by working with a financial advisor in Bountiful, UT, to not get overwhelmed with the process. The six steps outlined above will get you on the right track to ensuring that your wishes are carried out.
ARS can walk you through this process to protect you and your family
We have the experience, knowledge, and resources to ensure that your hard work is protected and that your loved ones are taken care of. With our guidance, you can take advantage of estate planning services to investigate and develop strategic solutions to protect your assets from estate taxes.
The estate planning process is not something to be taken lightly, and it’s vital that you mindfully ensure your loved ones are protected. If you would like more information on how ARS can assist in creating a comprehensive plan for your family and assets, please contact us today!
CERTIFIED FINANCIAL PLANNERS™ at Advanced Retirement Strategies
Working with a CERTIFIED FINANCIAL PLANNER™ is an excellent investment of your time and money. With the high standards for CFP® certification, you’ll know you’re getting the expertise and knowledge of a highly-trained and educated professional who will always act in your best interests and with the loftiest ethical standards.
Our team of retirement planners and investment advisors in Bountiful, Utah specializes in helping diligent savers with $250,000 or more of investment and retirement assets (not counting your primary residence) prepare for and then transition into retirement.
If you’re looking for a CFP® to help you live the retirement you have dreamed of, contact us now.