Getting Started with Estate Planning: Key Actions to Take

VaselineSeptember 16, 2024

0 5 minutes read

A careful estate plan often needs to achieve multiple goals, including ensuring the orderly distribution of assets, managing potential tax consequences, and possibly supporting the charities and organizations you care about.

As you begin the process, you will need to make some key estate planning decisions. An Ameriprise Financial, Inc. advisor. will help you think through them to create an estate planning strategy that reflects your goals and values.

Here are the key actions to help you develop your estate plan:

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Assign (and regularly update) your beneficiaries

Beneficiary designations in your financial accounts usually supersede any instructions in a will, so if they’re outdone, your assets can go to people you didn’t intend. To make sure this doesn’t happen, review your primary and secondary beneficiary designations each year and after major life events, including marriages, divorces, births or deaths.
Accounts that should be reviewed regularly include, but are not limited to:

Qualified retirement plan accounts
Pensions
Life insurance policies
Bank accounts
Certain property and commercial property contracts

Spotlight Tips

Avoid the possibility of your assets being distributed to the wrong person or organization by regularly reviewing and updating your beneficiary designations. Your beneficiaries override any instructions in a Will and should therefore be assessed regularly and after major life events.

Learn more: Why naming beneficiaries is an essential part of estate planning

Confirm that your property is correctly titled

Estate deeds help determine who gets the property after you die. Each state has its own laws regarding the inheritance of property. A real estate attorney can make sure your title deeds are valid, current and reflect your wishes.

Prepare for unexpected scenarios in your lifetime

In the event that you can no longer make decisions for yourself, here are three documents to insure to make sure your wishes are followed:

Durable power of attorney (DPOA): It allows you to appoint someone – usually a spouse or other family member – to take care of important financial matters if you are no longer able to, including paying bills or overseeing investments.
Health care proxy: It works as a health power of attorney, allowing your representative to make medical decisions on your behalf.
Advanced directive: Known as a living will, it documents your medical treatment preferences should you become physically or mentally incapacitated. Although advanced directives are valid throughout the US, different states have different rules. Work with an attorney to make sure your directive complies with the laws where you live.
HIPPA Issuing Authority: This gives your chosen representative access to your protected medical records and should be included in your advance directive.

Learn more: Addressing health care concerns in your estate plan

Drafting a will

A will gives specific instructions about what to do with your assets after you’re gone. It allows you to name an executor and appoint a guardian to look after any minor children or other dependents if you die. Once you have a will, make it easily accessible to your loved ones and estate planning team.

Learn more: An Introduction to Wills and Trusts

Decide if a trust is right for you

Trusts can give you more control over how you distribute assets while helping to reduce potential estate and beneficiary taxes. They also allow for greater privacy because they help avoid probate, an often expensive and time-consuming legal process that is a matter of public record.

Whether a trust is right for you depends on many factors, including your family situation and the size of your estate. As such, there are many types of trusts designed to meet different needs.

Learn more: High Net Worth Estate Planning: When to Consider Advanced Trusts in Your Plan

Name your executor and/or trustee

Executors and trustees play critical roles in estate planning, but their responsibilities can be complicated and time-consuming. Executors and trustees can be friends or family members; but if your estate is particularly complex, you can also hire a professional to take on these responsibilities.

Executor: An executor is the person you appoint to administer your last will and testament. Depending on the estate, this could include paying bills and taxes, distributing inheritances, and working with — or sometimes hiring — estate attorneys or tax professionals to carry out your wishes.
Administrator: If your estate plan includes a trust, a trustee will need to manage its assets. Among other things, the trustee may be responsible for managing investments, keeping accurate records, and preparing and filing annual tax returns.

Learn more: How to Choose an Estate Planning Team: Attorneys, Trustees and Executors

Align your estate plan with your values

An estate plan is more than assets. Think about the people, causes, and organizations you care about—and how you want to express those values through your plan. Using your assets to provide for your family’s future or support a cherished cause are ways your values can take life in your success plan.

Document your last wishes

Although technically separate from your estate plan, clarifying your final wishes can help your loved ones through a difficult time. Your final wishes should include details such as whether you want to be buried or cremated, what kind of service or memorial you would prefer, or where memorial donations should go. You may even want to pay in advance for your arrangements, just make sure your executors are aware of these plans and have the necessary documentation. Consider storing your final wishes documentation with your other estate planning records so they are easy to find when your executor needs them.

Talk to your loved ones about your plan

Clear communication of estate planning decisions with heirs and loved ones can make the process less stressful. By sharing your decisions in advance, you can help reduce uncertainty and potential conflicts down the road. As part of this process, share key contact information and the location of important documents for clarity and easy access.

Learn more: How to Talk About Estate Planning with Loved Ones

Start planning your legacy now

With an Ameriprise Financial, Inc. financial advisor. that will guide you through the process, you can create an estate plan that is aligned with your financial goals and creates a legacy that reflects your values.

Questions to Ask an Ameriprise Financial, Inc. Advisor during your initial follow-up consultation

How do I get started creating an estate plan?
How can I make charitable giving part of my estate plan?
Where are the opportunities to reflect my financial values in my estate plan?

When you’re ready to contact an Ameriprise Financial, Inc. advisor. for a free initial consultation, consider these questions at your appointment.

Find a counselor

The initial consultation provides an overview of financial planning concepts. You will not receive written reviews and/or recommendations.

Ameriprise Financial, Inc. and its affiliates do not provide tax or legal advice. Consumers should consult their tax advisor or attorney regarding their specific situation.

Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations or guaranteed by any financial institution, and involve investment risks, including possible loss of capital and fluctuations in value.

Securities offered by Ameriprise Financial Services, LLC. Member FINRA and SIPC.

The third party companies mentioned are not affiliated with Ameriprise Financial, Inc. This content was provided by Ameriprise Financial, Inc. Kiplinger is not affiliated with or endorses the company or products mentioned above.

VaselineSeptember 16, 2024

0 5 minutes read

Vaseline

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