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Part 6: Estate Planning Thumbnail

Part 6: Estate Planning

Austin Colby, CFP®, MBA

Our financial legacies are built over the course of our entire lives. Naturally, we want to be sure that everything will be administered and transferred according to our wishes. But how do we know that will happen when we’re no longer here?

The best way to be confident that your assets will go where you want them to is by having a quality estate plan in place.

Good estate planning answers two important questions:

  1. Will all of your wealth, money, and things go where you want them to go in the event of your death?
  2. Will all of your wealth, money, and things do what you want them to do in the event that you are still here but incapacitated?

When discussing estate planning, many people assume it is synonymous with having a will. While having a written will is a good idea, it is actually the last line of defense in estate planning. 

Will substitutes take precedence over a will. When administering and managing the estate, the instructions listed in any will substitutes actually take place before what the written will says. 

Will substitutes include the following:

  • Titling/ownership of accounts
  • Beneficiary designations
  • Transfer on death (TOD)
  • Payable on death (POD)
  • Trusts

Despite the connotations that come with estate planning, the majority of will substitutes can actually be accomplished with simple forms that don’t require extensive review with an attorney.

We monitor the beneficiary designations for all of our client assets, making sure they stay up to date through the occurrence of job changes, new babies, or other family developments. Beneficiaries can be added to all retirement accounts, workplace retirement plans, and life insurance policies. Bank accounts, CDs, and non-retirement investment accounts can have TOD or POD added at no cost. 

Trusts can help ease estate administration if there are special circumstances or nuances in how the assets should be distributed. If you own property in multiple states, are leaving a portion of your estate to someone with special needs, or have minors as heirs, a trust can be extremely helpful.

Other pieces of quality estate planning answer the following questions:

  • Who makes guardian and financial decisions for my minor children?
  • Who helps me make financial decisions if I am not able to do so on my own?
  • Who ensures my medical care wishes are handled in the manner I prefer when I cannot make those decisions?

Documents like powers-of-attorney, healthcare directives, and a written plan for minor children should be a part of all good estate plans.

While estate planning can seem intimidating and complex, oftentimes most of your financial legacy can be smoothly handled with good conversations, communication, and regular reviews of your wishes.