Stay up to Date
It is important to keep beneficiary designation forms updated.
Beneficiary designation forms on life insurance policies, 401(k) accounts and other assets will generally override any conflicting provisions within a will or trust. It’s essential to make sure all forms are checked and updated regularly, ideally on an annual basis.
“Inevitably, we all reach a point in life where we experience an inability to control what happens to us personally and how our property is managed or distributed,” says Herrold. “Whether it’s our health, our relationships or our assets, we each will reach a point we can no longer take care of those things or make adequate decisions about them.
“Thus, it’s critical that while we’re capable of caring for ourselves and our property and making meaningful and intentional decisions, that we put measures in place that will help us control our destiny,” says Herrold.
Even if you decide not to execute any documents, there are things you can do to make it easier on a surviving spouse if you die, for example, making sure certain assets are in both your names with right of survivorship.
“While many people may think of estate planning as just completing a ‘form,’ it is really much more than that,” says Barry. “It is deciding what you want done with your property and then preparing and signing the most appropriate and useful documents to accomplish it in the event of your illness or death.”
At a minimum, however, most should have a will and an advance directive for health care, says Herrold.
“I would also recommend you consider establishing a revocable trust. For many people, a durable power of attorney is the most important document, since it designates who will manage your affairs, if you are unable to do so, and it can avoid a costly, cumbersome and contentious guardianship proceeding that is supervised by a court. Regardless of one’s financial status, he or she can need someone to make everyday decisions for him or her.”
Plan For Less
Estate planning doesn’t have to cost a bundle. A will doesn’t have to be expensive. If cost is an issue, you may be able to get low-cost help through a legal aid group or student-run clinic. Remember when using online resources that state laws can vary widely, says Barry.
Whatever type of document you decide to implement for the future, it’s best to make that decision sooner than later.
“I find that many people put off estate planning because they have a hard time making these decisions, especially deciding who should be the guardian of their children, or if a trust should be put in place for children and who could be the trustee,” says Barry. “But, if you don’t decide, state law will govern, and not only may the result be something you did not want, it can be emotionally harder for your family.
“For many individuals, the process of naming persons to be their beneficiaries for life insurance and 401(k) plan accounts in the event of death is a regular occurrence,” she adds. “When that is done, it is usually a good time to also have a will or trust prepared in order to give effective directions for how to transfer assets that you individually own, such as your home, any other real estate and your bank and personal investment accounts.”