Many people avoid or delay discussing estate planning because it makes you face your own mortality. But proper planning makes it more likely that your wishes are honored and can often reduce taxes, legal expenses, and family conflict.
Comprehensive estate planning can be defined as the process of arranging the management and disposal of your assets during your lifetime and at the time of death, while minimizing taxes and penalties. 1 Not only do you plan for death, but you plan for incapacity during your lifetime. A truly comprehensive estate plan covers all the bases. At Financial Plans & Strategies, comprehensive estate planning means an asset-focused process whereby your financial and estate plans are integrated. This includes appropriate titling and designation of beneficiaries for each asset. Preparation and amendments of estate planning documents can be prepared or amended through the Michael J. Meiners law firm or an attorney of your choosing, but not by Financial Plans & Strategies.
You may be asking, why is my financial advisor discussing estate planning? Estate planning ties into your complete financial picture by:
- Preventing wealth from going to unintended beneficiaries
- Protecting families with young or special needs children
- Reducing or eliminating taxes or administrative costs for heirs
- Minimizing difficult decisions by family members or others on your behalf and thereby reducing their stress and anxiety.
So what checklist does our office use when estate planning for our clients?
- Complete estate planning documents. Depending on your estate planning needs, this could include trust documents (or multiple trusts), wills, transfer on death deeds (in Indiana and similar documents such as “Ladybird Documents” in Florida, Michigan and several other states), powers of attorney, health care representative appointments and living wills. Health care representative appointments and living wills are also known as advanced directives.
- Create a will. A will is recommended to assure that your choices are followed as assets are distributed to your heirs. However, if an asset passes via the will, it passes through probate. That involves court costs and attorney fees and an increased likelihood of challenges and litigation. Use of some of the above documents and proper titling and beneficiary designations can, in many cases, allow you to avoid probate.2,3 Wills are still recommended to cover unknown or subsequently appearing assets such as inheritances or post-death settlements.
- Review your beneficiary designations. Who are the beneficiaries of your retirement accounts and/or insurance policies? If you aren’t sure, it is probably a good idea to go back and check the documentation to verify (or change) whom you have designated as a beneficiary. It is also advisable to have written confirmations of your beneficiaries.
- Create a list of assets and liabilities. It is a good idea to provide your heirs with an asset and debt “map” they can follow, so that they will be aware of the little details of your wealth.
- Consolidate accounts. Consolidation means fewer account statements, less paperwork for your heirs, and fewer administrative fees to bear.
Estate planning is an important part of your financial picture. Begin a conversation with the professionals at Financial Plans & Strategies today at 317-882-7675 or fps@finplans.