If You Have Assets, You Need An Estate Plan

You don’t have to be wealthy by today’s standards to risk creating chaos for others when you pass on. The fact is that after you are gone, you can’t tell anyone what you intended to give to children, grandchildren, friends, or charity. And you certainly can’t represent yourself in the event of disputes. A good estate plan sets out your wishes in advance to prevent family turmoil after you die, and it can even bring the benefits of peace of mind and family harmony during your lifetime.

What Is An Estate Plan?

Simply put, an estate plan is a formal set of instructions for handling your assets when you die. It can include a will, trusts, insurance policies, beneficiary designations, and special instructions. It can also include a living will, powers of attorney, current tax and gifting strategies, family meetings, heir preparation, and relationship building goals. Properly constructed, those you leave behind will know exactly how to carry out your wishes, and there will be reduced risk of family infighting. Your loved ones may even grow closer through the process of cooperating with your wishes during your lifetime.

Some Key Components Of An Effective Estate Plan

The most obvious first step in estate planning is to tally all your assets and accounts. It pays to have organized records whether you build your own estate plan or hire a professional. You’ll want to consider both your home and its contents, all financial accounts, insurance policies, and existing estate documents in this exercise. You’ll also need to reflect on who are your natural beneficiaries, who might need your help the most, who has done you a great service in this life, any charities you believe in, and any other values-based goals you want to promote with your wealth.

Once you have all your records in order, you’ll need at least the following:

Will – Even if you have a trust, some aspects of estate transfers still require a will, even if it’s to direct the assets to your trust. Make sure it’s written by an estate attorney who knows your state’s laws.
A statement of wishes – If you don’t go the trust route, you’ll still want to write out your wishes about how assets get distributed by your executor, who is honor-bound to carry them out.

You’ll also want to consider having these during your lifetime:

Living will – Should you require end-of-life care, this document sets out important directions for whether to keep you on life support, etc., so your loved ones don’t have to make these difficult decisions.
Durable powers of attorney – During your lifetime, if you become incapacitated, you’ll want to have a trusted person handle your financial affairs.
Healthcare power of attorney – In case you can’t make important health care decisions for yourself.

Should you desire additional, legal control over how your estate is managed after your death, you may consider a trust. Trusts allow you to dictate the terms under which assets are distributed and are generally managed by you or a trusted professional during your lifetime; after your death, control passes to a successor trustee or a corporate trustee to ensure your wishes are followed to the letter. Trusts can have contingencies (such as not passing wealth to an irresponsible heir) to account for the curves life sometimes throws at you.

Remember, if you don’t have the above documents in place at the time you die or become incapacitated, your healthcare decisions could become very complicated, family members might disagree and fight over end-of-life matters or dividing your estate, your wealth may become totally disconnected from your wishes for its use, and the State may even have a hand in deciding how it gets distributed. Take action now to avoid the turmoil.

Tips For Building A Good Estate Plan

First and foremost, know your goals and have a strong sense of how your wealth might affect those receiving it. Talk with family members and study heirs to gain important insights into how they view wealth. You don’t have to tell them why you are having this conversation, but to choose beneficiaries well, you have to know who they are when you aren’t around.

Find a competent estate attorney to compile your wills and to serve as a sounding board for your ideas. It may be worth a few hundred dollars to have a frank conversation where you can get guidance about what works well and what doesn’t, any rules you weren’t aware of, and any items you might have overlooked in your plan.

Once your documents are in place, have a meeting with family and heirs (if you are able) to discuss your intentions and to explain what you expect after you are gone. You may need to do this over time rather than all at once. But family meetings can build trust among loved ones and bring up issues that need to be addressed in the plan. And don’t forget to store your documents with the attorney and to tell loved ones where those documents reside. As an alternative, you can use an online vault or even make multiple copies of your documents and distribute them so that in the event of an emergency, everyone knows what to do.

A Word About Trusts

If your needs are complex, and you choose to have an attorney draft a trust, it makes sense to bring your financial advisor into the process so you can discuss how those assets will be managed both now and after your passing. Alpha Fiduciary can serve as your single point of contact to deal with a professional trustee to direct the terms of your trust as well as build a custom portfolio solution that considers your current needs and future beneficiaries’ needs. We are also happy to refer you to estate planning attorneys to make sure that at the end of this long and arduous process, you have peace of mind and confidence that your wishes will be carried out successfully.

As your fiduciary, we believe you and your heirs deserve a better approach. Learn more about our trust services today!

About Alpha Fiduciary

We are driven by a desire to help our clients in as many aspects of their lives as possible, often extending beyond rates of return. Wealth management is more than handling your money. The dynamics of life influence your financial stability and can impact important decisions. We strive to understand the complexities of our clients’ lives so we can develop complete financial solutions that address them adequately. We are an advisory firm that helps you recognize, deal with, and solve life’s challenges through Total Wealth Management.