5 Things to Consider when Preparing an Estate Plan

tax returnsFor most individuals, preparing an estate plan is not high on the list of fun things to do. Deciding the fate of your belongings when you pass away can be a complicated and difficult task. This is especially true of individuals who have incurred a great deal of assets over their lifetime. No matter your age, here are some things you may want to accomplish this year with regard to your estate plan.

  1. Review and/or create a will – A will is an essential document that surprisingly, many people do not have. According to a survey conducted by the legal services company Rocket Lawyer, 50 percent of all Americans with children do not have a will. In addition, 41 percent of baby boomers have not taken the steps to write out their wishes in a binding legal document. This simple step will ensure that your belongings are divided as you wish and will save your family members the headache of dealing with issues such as probate when you pass.
  2. Create a trust, power of attorney and other important directives – Just as important as a will are the ancillary documents that provide insight into your wishes in the event of a medical issue or unforeseen situation. These documents will instruct your loved ones regarding your wishes should you be unable to speak for yourself. In addition to a trust, other legal documents might also include a durable financial and a medical power of attorney, a living will and other items.
  3. Determine beneficiaries – Most often beneficiaries include a surviving spouse and/or children. Take the time to ensure that your beneficiaries agree with the terms of your will. If you name one person as a beneficiary in a will, but another on a document such as a life insurance policy, that individual might be in line to receive a benefit even if your will states differently. We recommend reviewing your beneficiaries on a regular basis to ensure that all of your documentation reflect your wishes.
  4. Reduce the size of your taxable estate through gifting – As of 2015, the lifetime individual federal gift, estate and generation-skipping tax exclusion amount was set at $5.43 million. This means an individual can transfer up to $5.43 million during or after his or her lifetime tax-free. For a married couple, the unified credit is $10.86 million.
  5. Select a reliable executor – Your executor, as well as anyone named in your will or other estate documents, should have copies of all necessary documents. In many cases, parents choose their children to be executors of their estate. While often times this plan is sound, sometimes it can be a poor choice.

Consider these things carefully:

  • Could your named executor die before you do?
  • How well does he or she comprehend financial matters or the basic principles of estate law?
  • Can you easily communicate changes to your will with your chosen executor?
  • Does your executor have a vested interest in your estate? (Will they be fair? Can they be trusted? Will their spouse or significant other cause issues?)
  • Does your executor have an amicable relationship with other family members?
  • Should you consider a third-party to be your executor? (Financial Fiduciaries’ trust services partner, Vigil Trust is often asked to serve as an estate executor)

When in doubt about your estate plan, take some time to talk to a trusted professional. While it might save you money up front, do-it-yourself planning can create future problems, especially if your estate is complex. If you have questions, feel free to contact the team at Financial Fiduciaries.

About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
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