Getting Ahead on Estate Planning

A Little Planning Now Can Go a Long Way

2020 might go down in history as the year of canceled and changed plans, but it is almost over and 2021 is within sight. Kicking off 2021 with a few simple money management plans is a great way to turn over a new leaf, or build on previous saving successes. This week in our newsletter we’re bringing you a series of easy money-management tips to help get your year off to a good start. Today we’re focusing on a few easy estate planning strategies.

Estate planning means deciding who will inherit your assets and manage your responsibilities if you die or are incapacitated. Though it might seem like a bit of a strange or sad task, a few simple steps can save you and your loved ones hassle down the road.

Taking Inventory and Establishing Legal Directives

A good first step in estate planning is taking inventory of your tangible and intangible assets and estimating their value. Your tangible assets include your home or other real estate you own, as well as vehicles and other personal positions. Intangible assets might include investments in stocks, bonds, or mutual funds, ownership in a business, or life insurance policies. To determine the worth of some of these items, outside valuations can help, like recent appraisals of your home or business, and statements from your financial accounts.

Once you know the value of your assets, it’s a good idea to think about a few key legal directives. You might want to establish a medical care directive, also called a living will. This document contains information about your preferences for medical care if you are no longer able to make those decisions. Setting up a durable financial power of attorney can also be helpful. This allows another trusted person to handle your financial decisions if you are no longer able to do so. If turning over complete control to someone else feels concerning, consider setting up a limited power of attorney.

Updating Plans as Changes Occur

Live can be full of unexpected changes, and as these changes occur it’s a good idea to revisit your estate plan. Marriage, divorce, the birth of a new child, a career change—all of these events can impact your estate plan. It’s still a good idea to check in on your estate plan from time to time even if your situation hasn’t been significantly altered, because laws surrounding estate planning can change.

If you have recently moved to a new state or are planning a move soon, be sure to check up on your new state’s estate laws, because taxes can vary from state to state. A tax professional can be a helpful resource for navigating how to update your estate plan. Estate planning might seem intimidating, but like all money management, a little planning goes a long way.

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