“Fifty-six percent of Americans believe that estate planning is important, but only 33% of adults in the U.S. have documented their end-of-life plans. Of the estate plans made in 2021, 75.12% were wills, 18.78% were trusts, and 6.1% of people nominated a guardian for their young children.” (https://www.legalzoom.com/articles/estate-planning-statistics)
These are troubling statistics. If you have young children, it is very important to have a plan for care in case anything happens to you and your partner.
It is also very important that once you establish an estate plan to make sure it coincides with the beneficiaries that you have listed on your investment accounts. retirement plans at work and life insurance policies. Many people believe that by taking the time and spending the money on preparation of legal documents these will supersede everything else. However, the beneficiaries named on your investment accounts, retirement plans or insurance policies, will take precedence over your estate plan.
For example, Joe and Betty Smith worked with an attorney to create a trust that had provisions set up for their young children in case they suddenly passed away. This trust was very specific in stating that their kids would not inherit assets until they were 25 years old (unless for specific exceptions like a first-time home purchase or wedding). After making these decisions and paying the attorney’s fee, Joe and Betty thought they were set. However, they forgot to update their 401ks through work to make their trust the contingent beneficiary on their retirement plans in case something happened to them.
While a trust can be a proper designation for a beneficiary on your investments accounts, retirement plans or life insurance policies, you can also name direct beneficiaries such as your spouse or adult children. It is important that you review your beneficiary designations on all of your holdings to ensure they are set up according to your wishes.
1. Altruist: For a guide on how to check / add / update beneficiaries using the Altruist website please use this link that takes you to the Resources section of the Financial Plans & Strategies website: Altruist Resource Center
2. Schwab: For a guide on how to check / add / update beneficiaries using the Schwab website please use this link that takes you to the Resources section of the Financial Plans & Strategies website. Schwab Resource Center (scroll to the bottom of the page that opens to see the Update Beneficiaries section)
While FPS no longer prepares legal documents, we would be happy to recommend you to a trusted local attorney who can help you address these concerns and make sure you have a plan that corresponds with your long-term objectives.
If you create or update your legal documents, we would be happy to keep a digital version on file so that your heirs can receive a copy upon your passing.
We also will work with you to make sure that your investment accounts reflect these changes.
If you have updated your legal plan recently and do not believe we have a current copy on file, please contact our office.
We can be reached at 317-882-7675 by phone or text or you can email us at fps@finplans.com.
*Please be mindful that it is important to have an estate plan established or reviewed by an attorney in your state of residence since inheritance laws may differ throughout the country.