Estate Planning: Securing a Seamless Wealth Transfer to Your Heirs

Key Strategies for Effective Estate Planning

Proper estate planning answers the question, “Who gets what?” and avoids the problem of “Who got what?!”

Effective estate planning involves creating a comprehensive plan that includes wills, trusts, proper beneficiary designations and other legal documents to make sure your assets are handled according to your wishes. Keeping your plan up to date and communicating your intentions to your heirs can assure your plan is carried out as you desire and prevent misunderstandings and challenges during your lifetime (and beyond).

1. Create a Comprehensive Estate Plan:

• Draft a Will.

  Specify how certain assets should be distributed. Designate an executor to administer your estate and appoint a guardian for any minor children.

• Consider a Revocable Living Trust.

• A living trust allows you to transfer assets to your heirs without going through probate, saving time and effort, providing privacy, and potentially reducing legal challenges. It also provides a means for someone (your trustee) to take over for you if you become incapacitated.
• For second marriages or families with children from previous unions, a Revocable Living Trust ensures the wishes and needs of all parties are included.

• Beneficiary Designations:

  Ensure all your accounts (retirement, insurance, etc.) have up-to-date beneficiary designations.

• Medical Directive:

  State your wishes in a medical directive, select a person to serve as your medical power of attorney, and put the appropriate documents in place to ensure your wishes are carried out and you have someone to make decisions if you are incapacitated.

• Durable Power of Attorney:

  Select a trusted person and have a Durable Power of Attorney put in place to handle financial matters in case you need someone else to sign for you if you are unavailable or have become incapacitated.

2. Regularly Update Legal Documents:

• Life changes such as marriage, divorce, the birth of a child, a move to a different state or significant financial changes should prompt a review and update of your estate plan.

As financial advisors, we are often asked, "When should I tell my kids about my financial situation and how I want my estate handled?" The answer depends on you, your kids, and your relationship.

While there is no need to tell a 6-year-old about the estate plan, a 90-year-old should certainly inform their 60-year-old child. Generally, open dialogue helps with planning on both sides. Generally speaking, a more open dialogue can usually help with planning and, at a minimum, individuals who have a role in your estate plan should be notified and informed of the specifics they need to know, such as guardians, executors, and trustees, etc.

Steps to Build an Effective Plan

• Assess Your Assets

• Take inventory of all your assets, including real estate, investments, businesses, and personal belongings.
• Pay special attention to how each asset is registered or titled. You need to understand that many assets are not passed based on what is stated in your will. For example:
• Any asset you hold with another person like a bank account, brokerage account or property titled jointly will pass automatically to the other person upon the death of either.
• Life Insurance policies will be paid out to the person(s) named as beneficiary.
• IRAs, 401(k)s, annuities and other retirement plans will be paid out to the person(s) named as beneficiary.

• Put the Plan Together

• Determine your goals for your estate plan, such as providing for your spouse, children, other family members, or supporting a charitable cause.
• Work with professionals like financial advisors, tax experts, and estate planning attorneys to create a plan that matches your goals.
• Implement your plan and regularly review it to ensure it remains aligned with your goals and any changes in your circumstances.

By following these strategies and steps, you can create an estate plan that ensures a smooth transfer of your wealth to your heirs, honors your wishes, and protects your legacy for future generations.

If you are new to this, working on a financial plan with a financial advisor is a great place to start. Once the financial plan is in motion, they will likely refer you to an estate planning attorney to implement a plan that matches your needs. Working with professionals and regularly reviewing your plan ensures it remains aligned with your goals and circumstances.

Connect with a member of OneDigital’s Wealth Management team to ensure your plan is setup to protect your legacy, your family and their future.

Investment advice offered through OneDigital Investment Advisors LLC, an SEC-registered investment adviser and wholly-owned subsidiary of OneDigital. These materials are provided for informational and educational purposes only and do not constitute a recommendation to buy, sell, or hold any security, nor do they constitute legal, accounting, investment, or tax advice. The materials and the information provided are not designed or intended to be applicable to any person’s individual circumstances. These statements do not constitute an offer or solicitation in any jurisdiction. All included information and data are limited only to the inputs and other financial assumptions indicated.