Insights + News + Advice

Insights + News + Advice


Why every investor needs an estate plan.

For many people, a big part of the retirement planning process involves thinking about taking care of their spouse, children, grandchildren, and other loved ones after the individual dies. Although the federal estate tax only applies to estates larger than $11.58 million (or $23.16 million per married couple), estate planning is something that everyone should be thinking about, regardless of their net worth.

Even if you don’t have to worry about the estate tax, there are several basic estate-planning steps you should take to help ensure that your assets are distributed to your heirs according to your wishes. These estate planning basics also help to reduce the administrative burden your loved ones face when handling your final affairs:

Create a will and think about how your assets are titled.

It is important for everyone to have a will that stipulates how you want your assets to be distributed to your heirs when you die. If you die without a will, state laws will dictate how your assets are distributed. You should also think about how your larger assets are titled. For many people, it may make sense to work with an attorney to create a trust, which can give you more control over how and when your heirs receive the assets. Proper titling of assets can also help your assets avoid going through probate, which can be a long and cumbersome process for your heirs.

Establish important end-of-life documents.

In the event that you are not able to make decisions and manage your affairs near the end of your life, it is important to have documents in place that give someone you trust the legal authority to act on your behalf. A durable power of attorney lets your designated agent make financial and legal decisions on your behalf. A healthcare proxy (sometimes called a healthcare power of attorney) allows your agent to make medical decisions on your behalf, and a living will allows you to designate what types of treatment you want if you have a terminal illness. A release-of-information form lets doctors share your medical information with designated representatives.

Let your loved ones know about your wishes.

In addition to having these documents in place, it is important to communicate your wishes to your family members. Although these can be difficult conversations, it is better to explain your plans to your loved ones while you are still healthy. This will make it easier for them to understand and carry out your wishes.

Organize information about your accounts and assets.

Tracking down information about a deceased loved one’s various financial, legal, and medical affairs can be extremely difficult and time consuming. You can make the process much easier on your heirs by keeping a master file that includes account numbers, statements, and other important documents related to bank accounts, credit cards, loans, tax returns, insurance policies, and property titles. You should also include contact information for your accountant, financial advisor, attorney, doctor, insurance agent, and other professionals.

At Leelyn Smith, we are available to help guide you through the estate planning process by coordinating meetings with your accountant, attorney, and other advisors. If you have any questions about your estate planning needs, please do not hesitate to contact us.

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