Our lives have become so different from those lived by our grandparents. Estate planning involves new considerations too.
Family Composition and Conversation
These days many families include a wide web of relations and connections: For example, each spouse in a marriage might have children of various ages from previous marriages—as well as children from the current marriage. What are the intentions and understandings about who gets what? How can wishes be made clear and conflicts avoided?
In planning for death, just as in life, there are no magic wands. However, what was true for our grandparents remains true today: clear, honest conversation is always in style! As Legal Zoom explains:
No matter where you are in life, having an estate plan on paper is an important and selfless act for those you love.
While the conversation may feel difficult to begin, it’s one of the most beneficial discussions you can have. Communicating your desires to your friends and family ensures your wishes are heard, empowering you to determine what your legacy will be. Ultimately, the estate planning conversation will give you peace of mind and put your loved ones at ease knowing what their responsibilities are and how they can honor your legacy.
An estimated 68% of Americans don’t have a will. If they were to pass away without one, their estate would be managed according to the laws of the state in which they resided.
- Have the discussions you need to early, often and empathetically.
- Periodically re-evaluate the plan vis-a-vis material changes to the estate. For example, don’t forget to plan for your digital assets.
- Be upfront, open and inclusive. Make sure your chosen executor or trustee, understands your affairs and intentions clearly. The same goes for beneficiaries.
- Be practical. Keep notes in a safe place—or entrust someone with this responsibility. In addition to your formal will or trust documents, provide the practical information that will be so helpful to have handy when it is needed. Pertinent information includes: social security number, birth certificate, account information for all financial institutions, debtors/lines of credit , insurance providers/policies and marriage certificates as well as divorce paperwork.
Communicate with Your Executor Too
In addition to documenting intentions about assets and practical matters, it is important to be intentional when naming an executor to administer them. While not a must, typically, a close family member or friend is given the duty of executor. It is best to make sure that person is comfortable with the responsibilities and clearly understands your wishes.
Once appointed, the executor has fiduciary responsibilities and must distribute assets to the beneficiaries as specified in your will. Legal Beagle notes that some wills require the executor to get a bond. Referred to as estate or executor bonds, these are a type of fiduciary bond—they guarantee the faithful performance of the executor in accordance with applicable state laws.
It is easy and affordable to obtain an executor, estate or another type of fiduciary bond from a leading, national provider, Colonial Surety Company. Just get a quote online, fill in brief information, and enter a payment method. Print or e-file the bond right from your home or office—even while at court. It’s that simple.
Something For Everyone?
Many of us hope to give something to each person in the family web. Toward that end, strategize about how to best leverage assets like life insurance or 401(k) plans. Remember to keep the beneficiaries named on these policies updated. Legal Zoom observes:
Life insurance is another way to provide for a complex web of family members. You can, for example, leave most of your money and property to your spouse, but provide for your children by taking out a life insurance policy that names them as the beneficiaries.
Life insurance and retirement accounts like IRAs and 401(k)s aren’t passed down through your will, but instead, go directly to the primary beneficiary you have named — even if your will says otherwise.
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