5 Things You May Not Know about Estate Planning

Estate planning is essential to make your wishes and preferences known should you become incapacitated or deceased. Many estate plans consist of a variety of documents or other resources to fully indicate what should be done, how, and when.

Estate plans consist of many plans.

Estate plans communicate your wishes upon your death or inability to make decisions, and this often requires multiple documents. These documents should all be included in an estate plan:

• Indicated guardianship for minor children: Naming a designated guardian for minors is essential to determine who will finish raising your children if both parents or guardians pass away at the same time. Also, determining how insurance payouts and any other money left to your children should be outlined in this part of the estate plan.
• Will: A will should name your assets outside of any trusts and who the beneficiaries are of these assets.
• Indicated executor: The executor of an estate is an individual who is in charge of carrying out all of your wishes outlined in the estate plan.
• Living trust: A living trust allows someone else to manage your affairs if you become unable to do so, and it will enable you to pass on assets without involving the public probate system.
• Medical power of attorney
• Living will: A living will essentially tell your medical power of attorney what your wishes are in various medical scenarios.
• Financial power of attorney
• Tax planning
• Named beneficiaries
• How assets are held

Estate planning is for everyone.

Estate planning is not limited to the wealthy or those with numerous assets. An estate consists of everything an individual owns. Therefore, it is vital to ensure that things are in order should something unfortunate happen. According to Stephen White, regional leader of wealth planning for BMO Wealth Management in Milwaukee, “Spending a little time to get all your affairs in order is one of the best gifts you can give your family.”

Estate planning is especially important for unmarried couples.

If an individual dies without a will or an estate plan, state law will decide who gets your assets. Typically, this means that biological relatives will receive the estate, and an unmarried partner will receive nothing.

Estate planning for blended families is paramount.

Blended families complicate things, and the distribution of an estate is no different. If an individual has children from two or more marriages or individuals, they may want specific children or individuals to inherit certain assets, and perhaps others not inherit as much or anything at all. Creating an estate plan ensures that the right people receive the inheritance that you desire.

Ensure that documents are accessible in the event of your death.

Having an estate plan is only beneficial if those remaining can access it. Although a bank safe deposit box may seem like a good place for documents such as these, heirs often have a difficult time accessing deposit boxes immediately, as all assets become frozen. Instead, opt to store documents in a locked box or safe at home, with your lawyer, or both.