Estate Planning 101: What You Need to Know

For those who are considering retirement or have already retired, you may be wondering about estate planning. Specifically, what is it, what does it entail, and what do you have to do to prepare for it? We’ll address these questions and provide some valuable insight to help you ready your assets for your end-of-life phase. 

Planning your estate should never be overlooked or ignored. Failing to properly designate any beneficiaries before your eventual passing can pose dire consequences for your surviving loved ones later on. Instead, we recommend that you meet with a financial advisor to review your estate planning options, relative to your current financial situation, as soon as you are able. 

We hope that, after reading this, you have more confidence in your knowledge of the estate planning process and feel better prepared to begin. 

First, What is Estate Planning? 

Estate planning is the legal process of deciding what you would like to happen to your assets after you have passed. Do you want to bequeath them to your surviving loved ones? Donate them to charity? There are many options, depending on your portfolio, and your unique life circumstances will help you determine the best path. 

Why Should I Care About Estate Planning? 

When you have assigned your assets to specific beneficiaries, this will allow you to continue providing for these loved ones after you are gone. If you prefer to gift your wealth or physical possessions to charity, this will also enable you to perform one last good deed for communities and causes you care about that can shape an enduring legacy. 

Furthermore, if you do not have a next-of-kin and do not leave a legal will behind, the state may be able to take possession of your assets and use them however they deem fit. If you prefer to avoid this and grant an inheritance to a close friend or family member, you will need to plan your estate properly to ensure they receive what you want to gift them. 

When Should I Start Estate Planning? 

You can begin planning your estate at any phase in your life. You should also update it every few years to ensure it reflects your current asset portfolio and to ensure your list of designated beneficiaries remains accurate. 

Some people wait until later in life, such as when they are planning for retirement. However, many people do not think about this until a major life milestone such as having a child, losing a loved one, or acquiring a substantial asset, like a piece of property or sizable stock portfolio. 

We recommend that you start at the earliest time possible. This will allow you to continuously monitor and update your plan to ensure that your assets are directed to the proper beneficiaries on an ongoing basis. 

Should I Seek Out a Financial Advisor While Planning My Estate? 

A financial advisor can offer instrumental assistance in creating an estate planning strategy; especially when it comes to factors like planning your retirement prior to your passing. Some estate-related topics you may want to review with your financial advisor might include: 

• Beneficiary Designation – How to ensure assets are going to their intended recipients after your passing
• Documentation – Have your beneficiary forms been properly filled out to avoid probate
• Financial Impact – How your estate plan financially impacts you while you are living
• Navigating Documents – Translating complex legal and financial language into understandable information you can take action with
• Savings Plans – How much you should save at your current income level to prepare for retirement and your estate plan
• Fixed Income – If you are already retired, a financial advisor can help determine the fixed income you can establish for yourself while keeping your estate plan intact 
• Account Setup – Setting up any trusts or other accounts for your beneficiaries to inherit later on
• Action Plan – Outline exactly what you need to do to prepare for a new estate plan or revision to your existing one. 
• Tax Estimations – How much will the government take from your estate in taxes when it is bequeathed to your beneficiaries? 
• Early Inheritance – Can you afford to grant a loved one an early inheritance at this point in your life if you wish to do so? 

What Should I Bring to an Estate Planning Consultation with a Financial Advisor? 

When you are going to your financial advisor to discuss your estate plan, you should be prepared to provide information on the following items: 

• Bank accounts with current balances
• Retirement accounts with current balances
• All outstanding loans, debts, mortgages, car payments, etc. with current balances
• A list of recurring expenses like utility bills, rent, groceries, etc. with estimated costs
• Trusts
• Stock portfolios
• Real estate properties with the most recent valuation information 
• A list of all high-value personal possessions with dollar amounts included
• Names and information of all currently designated beneficiaries 

A financial advisor will work with you to review your complete financial situation and help you determine the best course of action. This will allow you to continue living at an acceptable quality of life while simultaneously preparing your estate.

Do I Still Need to Meet with an Estate Law Attorney if I Also Consult with a Financial Advisor? 

Depending on the complexity of your situation, most will and trust plans can be completed through our in-office attorney network. This is a convenient way to utilize the advisors team in putting your estate plan into action.  In certain instances where additional legal jurisdiction is required, your financial advisor can recommend an attorney to complete the estate planning process. It may prove a more streamlined process if your financial advisor and estate attorney have a preexisting professional familiarity with one another. 

Let’s Start Your Estate Plan Today

To date, our team at Journey has helped countless people of all ages, career statuses, and life circumstances develop an effective estate planning strategy that helps them ensure their designated beneficiaries will be cared for. 

Let’s begin working on your estate plan today. Contact us anytime to speak with one of our team members about scheduling a consultation.