Estate Planning Do’s and Don’ts According to the Experts

Estate Planning Do's and Don'ts

An estate plan is centered on four main documents; the will, power of attorney, an advance care directive, and the living trust.

The will distribute your assets. Creating a will determines what each person gets. A will require an executioner who ensures the terms are carried out the way you want. However, the will can’t distribute property held in a trust, life insurance proceeds or assets in joint titles.

What are the Do’s In Estate Planning?

1)    Gather all vital documents

The documents include vehicle titles, property deeds, insurance broker contact information, attorney’s contact information and official certificates such as marriage, and birth etc. Store them safely for easy revival later by loved ones. Plus, it helps you compile the estate plan as all relevant information is available.

2)    Execute your last will and testament

A will is vital to estate planning as it details how the properties are to be distributed upon death. Without it the intestacy laws will decide asset distribution. After creating the will, name the executor who will distribute the estate. Get assistance from reputable experts who understand the process at and leave things in order before your death.

Consequently, name the legal guardian for minors in the household and the properties plus any instructions for how pets are to be cared for.

3)    Complete your living will

Also known as an advance directive. It a legal document that authorizes someone to make medical decisions on your behalf regarding treatment when incapacitated such as your thoughts on life-support systems, and feeding tubes.

Appoint a power of attorney. Name someone who will make decisions when you are incapacitated. You can name a financial power of attorney to make all financial decisions and a health care power of attorney for medical decisions. The latter works with the advance directive concerning medical treatments.

4)    Establish a living trust

This ensures all your wishes are fulfilled upon your death, including wills and probate, and guarantees fast distribution of your assets to your beneficiaries.

The living will and grantor (you) have full control of assets in the trust in your lifetime. But upon your death, your chosen trustee gets full control of the trust and distributes assets as per your instructions. This method bypasses probate and saves you both money and time.

Irrevocable trusts guarantee assets protection and cannot be touched by lawsuits or creditors.

5)    Update the beneficiary list

Make sure you have an updated beneficiary list for your retirement accounts, pensions, life insurance etc as the transfers are made according to your beneficiary designations. Anytime there is a change in your family, review the list.

6)    Secure all your digital assets

These assets include shopping accounts, online banking, and social media accounts. Facebook has a provision allowing you to choose who takes over the account upon your death. However, consider other digital assets like blogs, vlogs, and other websites you own. How are they to be managed upon your death?

7)    Plan your final arrangements

What are your funeral plans? Plan for things like organ donations, pay-on-death bank accounts for funeral expenses. The will shouldn’t have this information because it’s normally read after the funeral. The best approach is to write a letter to your trusted loved one, or estate administrator about the arrangement.

8)    Make copies of the will and store them together with the documents

Gather all your estate planning documents and make copies. Keep the originals in a safe whether at home or a safe deposit box. Ensure there is someone with access to them upon your death.

9)    Speak with your loved ones

Talk to them concerning your wishes, what you want. Let them know that the wishes are to be followed. This creates fewer issues when you die. Share your memories and pass along some of your cherished photos or stories.

10)       Review your will annually

After making the estate plan, review it annually to ensure your wishes haven’t changed.

What are the Don’ts In Estate Planning?

Estate Planning Do's and Don'ts

1.     Failure to understand your plan

Most wealthy people rely on planners and fail to read it and understand the contents. Understand the fundamentals and insist the planner walks you through everything including documents. Take notes and make decisions after each session.

2.     Outdated beneficiary designations

Failing to update the beneficiary destination means assets can easily go to an ex-spouse or your last born doesn’t get anything. Review this document annually and update it.

3.     Failing to update assets ownership

Some assets may be scattered all over and not in a limited trust. This attracts unnecessary costs and complications. Review your plans to ensure they are current.

4.     Failing to fund revocable trusts

Assets in a living trust avoid probate, which is good for disability planning. However, when you skip a step and it’s created after the lawyer and interested parties sign all documents, they are funded and legal title to those assets go to the trust.

The real estate deed has to change to reflect the trust as the owner, similar to vehicle titles which mean opening a new account for transferring old account assets. Failing to do this simple step means assets are subject to probate.

5.     Failing to coordinate retirement plans and trusts

Naming the wrong type of trust as your retirement plan beneficiary increases taxes. You should have a language qualifying the beneficiary trust as see-through trust. Alternatively, name individual beneficiaries in the retirement plans instead of the trust.

6.     Failing to update an estate plan

The estate plan needs to be reviewed constantly to cater for life-changing events like the change in net worth, the birth of a new child, divorce, death, or marriage etc. Be in touch with the estate planner to review the current estate plan.

Final Thoughts

Practice the do’s while avoiding the don’ts to ensure that you leave behind a comprehensive estate plan with no complications. Fully prepare your family for an unforeseeable future and ensure you set your affairs in order beforehand. Consult a reputable estate planner for guidance and assistance.



South Florida Caribbean News

The Team provides news and information for the Caribbean-American community in South Florida and beyond.

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