The Importance of Creating an Estate Plan

couple enjoying retirement with family and grandchildren

Planning for your death is equivalent to public speaking and paying your income taxes for most people. However, relinquishing control and having a probate court judge making decisions for your family is not ideal, either.

That is why estate planning is important for everyone, no matter the size of your balance sheet. All estate documents, whether a will, power of attorney or even a revocable trust, are crucial to protecting you and your assets as they give you a voice when you are unable to speak for yourself.

When thinking about how to start your estate plan, it is best to keep it simple. Write a list of your current assets and liabilities and identify how you would like each asset to pass at your death. This will help move the estate planning process more efficiently.

Then ask yourself a few questions, such as:
  • Do you want your beneficiaries to receive assets outright with full control or would you prefer to set certain parameters for the use and disposition of those assets?
  • Do you have any charitable intentions?
  • Do you have minor children who will need to be cared for (financially and otherwise) at your death?
  • Do you need to provide an income stream to replace your income for your family?
As you go through the estate planning process, SouthState Private Wealth Planning Advisor Kathryn Diminich recommends a few key steps in making your final wishes clear and easy for your loved ones left behind.

Hire a Lawyer who Specializes in Estate Planning

While technology has made it easier for many to create their own wills and trusts, you should always consult an attorney who specializes in estate planning. There are many facets to estate planning, and it is not a one-size-fits-all approach. You need a professional with practical experience, as well as technical expertise in dealing with all matters of probate and estate planning.

For example, a lawyer who is knowledgeable and trained on your state probate laws could determine if a will or a revocable living trust is more suitable for your situation. While both a will and a revocable trust can outline the ultimate disposition of your assets, there are differences between them with regards to the information that must be filed with the probate court and what becomes available for the public to know.

A revocable living trust can also provide protection for you and your assets if you were to become incapacitated. A lawyer can explain the differences in more detail and help you to determine what is best for your situation and desires.

Name an Executor and/or Trustee

An executor is a person named in a will to oversee wrapping up an estate and distributing assets according to the will. A trustee’s responsibilities are similar under a revocable living trust. Your executor or trustee can be a family member, close friend, lawyer or financial professional.

Be sure to sit down with the person you choose as your executor or trustee to discuss their willingness to serve. Their duties will include managing your assets, paying your debts and taxes, and distributing your assets to your beneficiaries.

Depending on the size of your estate, using an outside party like a lawyer or banker as executor or trustee could be wise. They have expertise in navigating the probate court, estate tax laws, and can remain impartial if things between family members become tense. Your estate can cover their professional fees.

Prepare Your Power of Attorney and Health Care Documents

A power of attorney is a document that is valid while you are alive and authorizes someone to act on your behalf. A power of attorney can authorize health care and/or financial decisions. There are also additional medical documents, such as a living will, that can indicate your preference for end-of-life care.

Signing a power of attorney while you are able allows you to decide in advance the person you trust most to act on your behalf. This means the power of attorney has an obligation to exercise reasonable care and to act in your best interest.

Review Your Life Insurance Policy

You should also consider any life insurance policies during your estate planning process. If you have had any changes to your finances, such as a new job or new debt, you may need to update your policy to match your current financial needs. Keep in mind that factors including age and health will affect the cost and availability of life insurance. Additionally, a lawyer can assist you in determining who to name as primary and contingent beneficiaries.

Organize Your Documents

Communication and organization are important steps in estate planning. If you have signed a will or revocable living trust but no one can find it, your final wishes may not be carried out. Your family could instead spend years in probate court trying to divide your assets.

Talk to someone you trust about your estate plan documents and where they can be found. Use a safe deposit box or another safe place that your executor/trustee can access. Important documents to make others aware of include your will or trust documents, life insurance policies, beneficiary designation forms, deeds to any real estate, and certificates for stocks, bonds, annuities. It’s also wise to share information about your financial accounts and safe deposit boxes, retirement plans, and any credit card debt or mortgages. Better yet, make a list of these documents and where they can be found.

Have a Conversation about Your Wishes

Do you have stepchildren who you want to provide for after your death? Have you been caring for a grandchild? Being clear and specific about your wishes will help reduce the potential for conflict among your heirs after your death and alleviate your concerns regarding the care of loved-ones after your death.

There are many factors to consider when your estate plan. Your local SouthState wealth advisor is here to help you start the conversation.

This article is for informational purposes only and does not constitute legal advice. You should seek the advice of counsel for your specific situation.

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