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9 Estate Planning Must-Haves

9 Estate Planning Must-Haves

September 25, 2019 | Read Time: 7 Minutes

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We know you love your family and there’s nothing you wouldn’t do to help them. One of the best things you can do to secure their future financial safety is to tackle estate-planning! Your loved ones (heirs) will thank you for not having a legal mess to sort out!

At Huberty, we often find that many of our clients want to get going on their estate planning, but they don’t know where to start or believe having an estate plan simply means drafting a will or a trust. There is much more, however, to include in estate planning to ensure all of your affairs are in order. These nine documents can help you and your family be prepared for any unfortunate or unforeseen events.

1. Last Will and Testament

    A will gives you the power to decide what is in the best interests of your minor children after you are gone. It also can help determine what will happen to your personal effects. A will typically nominates a personal representative – the person who will be in charge of following your directives. You also must have a will to name a guardian of your minor children. If you are married, each spouse will need a separate will.

    In the absence of a will, the probate court will name the personal representative of your estate and guardian of your minor children. Update your will as big life events happen such as marriage, divorce, inheritance, the birth of a child, etc. If you move to a new state, you should have your will reviewed by an attorney in that state.

    You can alter your will by making a new will or adding an amendment called a “codicil”.

    2. Revocable Trust

      A revocable trust is another tool for distributing assets to your heirs while avoiding potentially expensive, time-consuming, and public probate court proceedings. In a revocable trust, you name a trustee to manage your property. Unlike a will, a revocable trust can be used to manage your assets now or after you are gone.

      You can change a revocable trust during your life by either restating or amending the trust.

      See Huberty’s recent blog for a more in-depth analysis of wills versus revocable trusts here: https://hubertycpas.com/Post.php?s=how-to-choose-between-a-will-and-a-revocable-trust

      3. Beneficiary Designations

        When you open a brokerage retirement account or purchase life insurance, you are often given the opportunity to name a beneficiary. The beneficiary is the person you want to inherit those specific assets upon your death. These designations take precedence over your instructions in your will and/or trust. It is important to closely monitor your beneficiary designations to ensure they are consistent with your overall plan. You should keep copies of your beneficiary designations with your other estate planning documents.

        4. Durable Power of Attorney for Finances and Property

          The durable power of attorney for finances and property is a document in which you choose someone to act on your behalf, both financially and legally. The document allows you to name somebody to act for you immediately or, in the alternative, when you become incapacitated (i.e. cannot mentally act for yourself).

          This document is important and should not be put off. You must be legally competent to execute a durable power of attorney. Often, we hear clients that worry about relinquishing control and put this task off until they are no longer legally competent to do so.

          If you do not designate an agent to act for you under a durable power of attorney, your family’s hands could be tied should you become incapacitated. Your family would be required to turn to the court system to have a guardian appointed for you.

          This is important as incapacity can happen to young people as well as the elderly.

          5. Health Care Power of Attorney and Declaration to Physicians

            The health care power of attorney makes it possible for you to authorize other individuals (called health care agents) to make health care decisions on your behalf should you become incapacitated. It may also be used to make or refuse to make an anatomical gift (a donation of all or part of the human body to take effect upon your death). This is different than the durable power of attorney for finances and property.

            The declaration to physicians (Living Will) makes it possible for you to state your preferences for life-sustaining procedures and feeding tubes in the event you are in a terminal condition or persistent vegetative state.

            6. Marital Property Agreement

              Marital property agreements, also known as prenuptial or post-nuptial agreements, are an effective way of defining how property should be distributed in the event of a divorce. More relevant to this article, though, a marital property agreement can be used to avoid probate. The Wisconsin Marital Property Act provides that married persons may agree that upon the death of either spouse, either or both spouses’ property, including any after-acquired property, may be transferred without probate to a designated person, trust, or other entity. As a result, marital property agreements, which direct how a married person’s assets are to be distributed, can protect those assets from probate if the asset is located in Wisconsin.

              7. Provision for Digital Assets

                We believe you should decide what to do with your digital assets, including your computer hard drive, digital photos, and information stored in the cloud or online accounts such as Facebook, Google, Twitter, etc. Be sure to include a list of your passwords.

                8. Letter of Intent

                  This document carries no legal weight and does not require an attorney, but we find it can sometimes give our clients peace of mind. In this letter, you can include instructions, requests, and important personal information that does not belong in your will and/or trust. For example, you may have detailed instructions about how you want your funeral or memorial service to be performed.

                  9. List of Important Documents

                    To ensure a seamless transition upon your death, make certain your family or those you trust know where to find everything you have prepared. Make a list of documents, including where each is stored. Include your paperwork for:

                    • Life insurance policies
                    • Annuities
                    • Pensions or retirement accounts
                    • Bank accounts
                    • Marriage/divorce records
                    • Birth and adoption certificates
                    • Real estate deeds
                    • Stocks, bonds, and mutual funds
                    • List of bills and accounts including contact information and account numbers for each

                    Conclusion

                    There is more to estate planning than deciding “who gets what”. It is also about making certain you are cared for if you become incapacitated, and that your family members and other beneficiaries are provided for. A will is a great start, but a solid and effective estate plan utilizes all of the documents listed in this blog. For more information, or to get started on your estate planning, contact a Huberty consultant!