Estate planning can seem complicated so much so that we put it off. But put it off too much, and you might regret it. Here are some estate planning basics to get you started.
Account Titles
Make sure your accounts are titled correctly. If you’re married and don’t have any estate planning documents. The least you can do is own things jointly. This is what my Dad called a farmer’s will. Most of my family on my Dad’s side were farmers in Tecumseh Michigan. If you own things jointly, it goes to the spouse when you die.
Transfer on Death
Account titling is a simple and effective plan. But not everyone uses it. They own cars and checking and saving accounts individually. If this is the case, you can use a transfer on death (TOD) to move these accounts into your spouse’s or children’s names when you pass. You can even designate charities if you wish.
Beneficiaries
If you own IRAs, Roths, 401ks, or other investment accounts, make sure you have primary and contingent beneficiary information on file. Sometimes we open accounts open in a hurry with the best intentions of adding beneficiary information later but never get around to it. Make sure your accounts have beneficiaries on them and review them every couple years.
Estate Planning Documents
Eventually, everyone should have an estate plan. That includes having estate planning documents drafted. Here’s a list of documents you might consider:
- Wills
- Power of Attorney (for finances)
- Healthcare Power of Attorney
- Living Will
- Patient Advocate
- Advanced Medical Directives
- Trusts*
*A Trust gives you more control after you’ve passed. Depending on current laws, you might consider having a trust drafted.
Takeaway
Several things can go wrong if you neglect your estate plan. Many don’t require fancy estate planning documents. Simple things like setting up your accounts jointly or using a transfer on death form can accomplish a lot. Estate planning documents can make up the difference, especially for health. No matter what you do, learn the estate planning basics.
