Estate Planning: More than Just Wills and Trusts

Estate planning is generally associated with wills and trusts. While they are certainly key elements of any estate plan, the estate planning process encompasses much more than wills and trusts. In this blog post, we will highlight two other considerations that should be factored into the planning process:

  1. Non-probate assets are assets that, unless specifically incorporated, pass outside of wills and trusts. Non-probate assets include life insurance policies, retirement accounts, accounts owned as joint tenants with rights of survivorship, and any other asset which one or more named beneficiaries have been designated to inherit at death (such as a pay on death (POD) designation for a bank account, or a transfer on death (TOD) designation for certain investments.) It is important to review beneficiary designations for non-probate assets periodically, and to update them as needed. One common mistake is to create a trust for minor children as part of the estate planning process, but to name the minor children directly as the beneficiaries of a life insurance policy or retirement account. By doing so, any assets paid out by contract to named beneficiaries will not flow through the trust you created, so you may be unwittingly circumventing your own wishes for distribution, timing and control of the assets.
  2. In addition to planning for how, and to whom, your assets will pass when you die, your estate plan should also include your wishes for what will happen if you are incapacitated and unable to either manage your own financial affairs or to speak for yourself for medical care. By preparing a durable power of attorney for financial transactions, a medical power of attorney and a living will, you will be taking an important step toward easing any potential burden for your loved ones as a result of your incapacity.

Estate planning can be difficult to talk about, but taking the time to plan for your own death or incapacity is a tremendous gift to your loved ones. Contact us for more information.