Five Important Steps to Estate Planning

3 generations of a family walking together on a fall day

From the desk of Jim Maggs…

I am often asked questions about Estate Planning, both by clients and friends. The concept can be overwhelming and most people just do not know where to begin. In this issue of the Firm’s E-Newsletter, I have outlined several simple, yet important steps to help you begin to put a plan in place for you and your family.

Of course, should you have any questions, please do not hesitate to contact me.

Jim Maggs

1. Make a Will

Creating a will is the single most important way you can ensure your assets are distributed according to your wishes, to family members or other beneficiaries. Without a will in place, the court system will determine many issues for you, such as what happens to your property upon your death and who takes custody of your minor children.

2. Select a Qualified Executor for Your Estate

An executor is responsible for paying your debts and distributing your assets in accordance with your will. For many individuals, the executor is their spouse or one of their adult children. A professional executor, such as a certified public accountant or other trusted adviser, may be desirable, as he or she may have more experience at administering complicated estates. The complexity of your estate will therefore play a significant role in determining who you should select as the executor.

3. Review and Update Your Beneficiary Designations Under Life Insurance Plans, Retirement Plans and Payable-on-Death Bank Accounts

Life insurance policies, retirement plans, and payable-on-death bank accounts are all considered contracts. The proceeds under such policies, plans and accounts do not, generally, pass through your estate, rather, the beneficiary you designate in the policy, plan or account will inherit these assets directly, regardless of what your will provides. Make sure you update your beneficiary designations periodically, especially after a marriage, divorce, or other major life event.

4. Make Sure Legal Documents are Accessible to Family

Create a list documenting where all important paperwork and assets are stored. This should include birth, marriage, and death certificates, especially of children, spouses, and other potential heirs. You will also want to include important financial records, including an updated list of all your assets.

5. Make A Living Will

A living will is a document that lets you state your wishes for end-of-life medical care in case you become unable to communicate your decisions. It has no power after death. A living will is often combined with a “health care proxy,” which allows you to designate someone to make health care decisions for you if you become incapacitated. The living will and the health care proxy together make up what’s called an “advanced health care directive.”

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