Posted on May 6, 2020 in

Simple Steps to Create an Estate Plan

Having spent the better part of two decades helping clients create, review, and assist with changes to their estate plans, I’ve seen and heard quite a few scenarios when dealing with estates. Below are a few tips to help you through the process of estate planning. Following these simple steps will be instrumental when visiting with your financial planner and estate attorney to draft, review or change your estate plan.

Making a Will
This may sound trivial to some, but not having a Will is like not brushing your teeth and then hoping your teeth look great for the rest of your life. It’s possible, but not likely. A Will can be a simple document that explains where you want your assets and valuables to be sent after you pass. Keep in mind that retirement accounts have their own beneficiaries, and these instructions may be different than who or where you want other items to be sent such as heirlooms or cash from bank accounts. A Will can also create trusts after your passing to protect assets and direct where and when they are to be distributed. This is especially important if you have minor children.

Life Events
Have you recently had a child? Been married or divorced? Are there children involved? Not only might you update everyday items like cell phone users or address changes when you move-for estate planning, some life events can make your current plan useless and require change. Consider the example of a second marriage with children. You marry someone with children, and you have your own. In some states, when you pass, your assets go straight to the spouse. The spouse may have a plan to leave their assets to their children thus leaving your children out of any inheritance. Having your own plan in place to ensure your children receive something is paramount and far too often overlooked.

Consider Health Care Decisions
Most Floridians remember a case in Tampa where a woman was on life support for years because the husband and her parents argued over the woman’s directives. The battle even ensued on national news. Having a Living Will and Healthcare Surrogate can stop those types of situations from occurring because the Living Will and the Healthcare Power of Attorney will know which decisions to make as well as end of life arrangements, including organ donation.

Business Succession
If you’re the sole proprietor or large shareholder of a business, you should have a plan on how to sell your shares or business. Do you have a buyout option in place? What about life insurance agreements? Many times, the spouse of the deceased isn’t involved in operations and may not want the burden to take over. The other owners would probably feel the same. A carefully crafted agreement would easily explain how the business would continue to run or how to sell those shares in the event of a death.

Understanding The SECURE Act
The SECURE Act, signed into law December of 2019, changed estate plans in a major way. If your estate plan was created before December of 2019, a review of the plan with your estate attorney is necessary to ensure your wishes can still be followed given the new rules on retirement assets. Keep in mind that certain laws are set to expire in 2025, which is why I recommend reviewing your estate plan every few years. Not only does life happen, but estate laws change too.

Organize Your Life
Finally, keep your estate documents in a safe place, maybe a cloud repository to keep copies of important documents to review when needed, but allow the attorney or bank via safe deposit box to hold originals. Also, if you are the only one with knowledge of your usernames and passwords to bank accounts, investment accounts, etc., provide your spouse or family the know how to obtain that information when necessary. When in doubt about any of the above steps, ask your financial planner or trusted fiduciary. We’re here to help.

Derek M Oxford | CFP®, AEP®
Financial Advisor