As we have all learned recently while living through a global pandemic, life can deal you any number of surprises, the most difficult being the death of a loved one. As estate planners, we believe it is extremely important that you and your loved ones prepare for the unexpected by making sure that you understand and complete some basic estate planning steps.
First, you and your loved ones should make sure that you have an updated Will. In a Will, you can indicate how your assets will be distributed in the event of your death. Many people understand how important it is to have a Will in place, knowing how it will protect their assets and their loved ones after they are gone. However, it is also vitally important to update your Will regularly. Things change while we go about living our everyday lives and periodically you should take a moment to check in, take stock of your assets, and update your Will accordingly.
Next, you should make sure to set up a Power of Attorney, especially a financial Power of Attorney, to prepare for any possible incapacitation or illness. It is important to find someone you trust who can take care of you and your assets if you are unable to do so yourself. Setting up a Power of Attorney ahead of time is in everyone’s best interest as it minimizes confusion in an already stressful time by appointing who can act on your behalf.
In addition to creating a Will and designating your Power of Attorney, it is also imperative that you designate the beneficiaries of your retirement accounts. Whether it is a 401(k), an IRA, or any other retirement account, you can take the simple and quick steps to designate the primary and secondary beneficiaries who you want these accounts to go to in the event of your death. Designating your beneficiaries will help keep your assets out of expensive probate proceedings and will take yet another burden off of your loved ones.
In order to protect the beneficiaries of your estate, it may also be in your best interest to understand a bit about estate tax laws. Understanding what your estate looks like and how it will be taxed, can allow you to more properly prepare. In some cases, you can even take steps to help limit your estate’s exposure to taxes.
Another option to help your estate avoid expensive probate court proceedings is to set up a Trust. A trust can allow you to get more specific than a Will when designating where all your assets should go after your death and it can be harder to contest. Speaking to an estate planning professional can help you decide if a trust is right for you!
Estate planning should always be a priority but it can often be a topic that is difficult or uncomfortable to think about and you may not even realize everything that you should be including in your estate plan. That is why it can be helpful to get in contact with an estate planning professional, like those at Horn & Johnsen! We can help you tackle this uncomfortable topic in order to safely and confidently plan ahead for the future. Contact us today to get started: https://hornjohnsen.com/