Estate planning is only for really rich people, right? Wrong! You always have an estate plan. It just depends on whether it’s a plan you set up, or a plan that the state you live in has set up for you. If you die intestate, without a will, the state in which you live dictates who gets your stuff. It could go to who you want, but it might not, and it will have to go through the probate process. Probate usually takes either a lot of time or money, and sometimes a lot of both. Probate is also all public record, which means anyone can look into what’s going on and who is getting what. This honestly depends a lot on your state. In Tennesse probate is not that bad, while in California it is!
Some ways to avoid probate. Title everything properly and make sure you have both primary and contingent beneficiaries on your retirement accounts, life insurance policies, and even non-jointly held Bank and Investment accounts. For Bank acounts this is Payable on Death (POD) and for Investment Accounts this is Transfer on Death (TOD).
Even if all of this is done you still need to have at least a basic will. This will name the executor/executrix, who is in charge or handling your affairs once your gone, say what happens to your personal belongings like a card collection or that ring from your Grandmother. If you have minor children it will name who is responsible for raising the kids. Remember, if you don’t put these things in writing the state will make these decisions for you. A will still needs to go through Probate, so it should be primarily designed to catch things you didn’t handle with items above.
Some other important estate planning items are Powers of Attorney for healthcare (who can make decisions on your behalf if you can’t, like if you’re in a coma or recovering from surgery), living wills and powers of attorney for finances.
Make sure if you are going to work with an attorney on these items, which I recommend, you use someone who specializes in estate planning and is licensed in which you live. If you move to a different state, it’s good to have everything reviewed by an attorney in your new state to see if anything needs to be updated.
If you need to make small adjustments to a will, no big deal! Doesn’t mean you have to start from scratch. You can make adjustments, called codicils, without having to re-do the whole document.
Make sure once you have your documents you keep the originals somewhere safe, keep digital copies, and make sure you talk with those who you designate as guardian or executor/executrix so that doesn’t come as a surprise when you’re gone. Just because you name them, does NOT mean they have to do it.
The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.
Schadel Financial Group and LPL Financial do not offer legal advice or services.