By Greg Sellers, Member at Warren Averett
Estate planning can be a sensitive and complicated subject. Family dynamics, emotional hurdles and complex regulations can make it feel overwhelming. If you’ve been putting off estate planning because it feels uncomfortable or challenging, you aren’t alone.
But beyond the initial discomfort, effective estate planning can actually provide a sense of peace. Most of the time, the hardest part is just getting started. That’s why I’ve outlined four key actions you can take now to turn estate planning procrastination and anxiety into confident action.
1. Compile a comprehensive inventory.
For the smoothest estate planning process, start by recording a detailed inventory of all your assets (such as bank accounts, investment accounts, loans receivable, life insurance policies, closely held businesses, retirement accounts, vehicles, homes, household furnishings and collections) and all your liabilities (such as mortgages, bank loans, lines of credit and credit cards).
This provides a clear picture of your financial situation, and it gives essential information to those responsible for managing your estate.
2. Execute essential documents to outline your desires.
To ensure your estate is managed according to your desires, it’s crucial to execute the following key documents:
- Last Will and Testament – Lists family members and beneficiaries, directs asset distribution (specifying outright ownership or trust interests) and names an executor and alternates
- Living Trusts – May be established to avoid the probate process, but should be utilized in conjunction with a will to make sure nothing falls through the cracks
- Healthcare Directive (sometimes called a Living Will) – addresses end-of-life care, outlines the use of extraordinary efforts for prolonging life and appoints a healthcare proxy
- Power of Attorney – appoints an “attorney-in-fact” who can have authority to transact business and act on your behalf
3. Make sure that beneficiary designations are in line with the estate plan and documents.
Make sure that you have added designated beneficiaries to your life insurance and retirement accounts. You may also choose to add designated beneficiaries to your bank and investment accounts. By aligning your beneficiary designations with your overall estate plan, you can avoid conflicts and ensure your assets are distributed according to your wishes.
4. Assemble a team of advisors
While gathering information online can save time, using online tools to draft your estate planning documents may not yield the best results for your unique situation. It’s crucial to involve specialists from various fields to ensure your interests are fully addressed.
- Attorney – Drafts legal documents and facilitates dispute resolution
- CPA – Assists with tax planning, compliance and financial analysis
- Banker and Investment Advisor – Provides financial expertise and ensures your assets are managed and transferred efficiently
- Life Insurance Advisor – Helps you leverage life insurance to meet your financial and estate planning goals
These four steps are only the beginning, but with these tangible actions completed, you’ll be well on your way to establishing an effective estate plan.
