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Five Tips for Developing an Estate Plan During National Estate Planning Awareness Week

Did you know that Congress has designated October 17-23 as National Estate Planning Awareness Week? There is no better time than now to set up your estate plan.

Estate planning is a pivotal aspect of financial well-being, yet it is frequently overlooked. According to the 2022 Wills and Estate Planning Study from, only 33% of adults in the U.S. have estate planning documents, such as a will or living trust, in place.

Why Should You Have an Estate Plan?

An estate plan is the legal documentation that helps you control who will inherit your money and property, as well as who can make medical and financial decisions on your behalf. You may think it’s fine to skip estate planning, or that wills and trusts are only for the wealthy. In fact, an estate plan can provide you with peace of mind. It helps ensure that your assets are protected, plans are in place if you become ill, and your property is passed down according to your wishes.

Here are five considerations to help you begin developing an estate plan:

  • Take Inventory of Each Asset and Determine Its Value. Account for all items, including liquid financial assets, real estate, and intangible assets, such as patents and copyrights. Then determine the financial value of each asset. Remember to factor in debt.
  • Select Your Beneficiaries and Decision-makers. Review beneficiary designations on your IRAs and other retirement accounts, insurance policies, and group benefits. Assets that have named beneficiaries may include annuities and even some bank accounts. When it comes to choosing a decision-maker, many think first of a family member or close family friend. Choose a sensible and responsible executor who can take care of any remaining financial obligations and ensure that your wishes are carried out. You will also want to prepare a financial power of attorney. This document allows you to name an individual to make financial and property decisions for you if you become unable to manage your own affairs.
  • Consider Establishing a Revocable Trust. One way to leave assets to your loved ones is by setting up a trust. Revocable trusts allow for management of your property while you are alive. They also enable property to pass to your beneficiaries without a court proceeding. During your lifetime, you can make modifications to the terms of the trust. Upon your passing, the provisions can no longer be altered. Revocable trusts allow for an added layer of control and privacy over your assets that is not possible when assets are passed through a will.
  • Write a Will and Set Up End-of-Life Documents. Upon your passing, your will governs who will receive property not otherwise designated by titling, the terms of a trust or a beneficiary designation. Other end-of-life documents might include a living will. This covers your wishes concerning end-of-life care, such as whether you would like to receive life support. Be sure to name a health care surrogate, who can make medical decisions for you if you are unable to speak for yourself.
  • Review Beneficiaries and Update Your Estate Planning on a Regular Basis. Make sure the beneficiaries named are still the ones you want. It may have been years since you looked at the beneficiaries you assigned when you first opened the accounts. Frequently, former spouses and deceased family members are named as beneficiaries. Although they may have been suitable at the time, these beneficiaries should be reviewed and updated.

Estate planning is not a “set it and forget it” event. As long as you keep living and your world keeps evolving, there is the possibility that the plan you put in place no longer works. Life events, such as moving across state lines, and rule changes, such as federal estate tax-exemption changes, impact your estate plan. Common events that will result in beneficiary changes or additions include births, deaths, marriage and divorce. It’s important to review your beneficiaries regularly to ensure that everyone you care for will be covered by your plan.

A comprehensive estate plan customized to you and your needs, as well as your legacy and your heirs, will give you peace of mind. Find a CERTIFIED FINANCIAL PLANNER™ professional who can help you tie all the different parts of your estate together into a plan that represents your wishes. You can then have a licensed attorney draft or update your will, trust, power of attorney and end-of-life documents.

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