The new year is an exciting time to start fresh and celebrate new beginnings. As you get to work putting your financial house in order, now’s an ideal time to run through your estate planning checklist.
If you haven’t started your own to-do list, that’s okay! Our team at Legacy Wealth Advisors has put together a quick, five-step list anyone can use to brush up their estate plan heading into 2022.
Item #1: Assess Your Assets
First things first, take stock of your assets. From family heirlooms to vacation properties, you need to account for everything of value in your estate plan.
This could include:
- Houses
- Rental properties
- Cars
- Boats
- Artwork and collectibles
- Jewelry
- Electronics
It’s possible you may have accrued or lost assets since the last time you looked at your estate plan. Taking a few minutes to check can help ensure your assets are properly passed down to loved ones when the time comes.
Item #2: Review Your Insurance Policies
Once you’ve reassessed your assets, the natural next step is to review your current insurance coverage. Does your homeowner’s insurance adequately protect your belongings? Or do you need to add additional riders or endorsements to cover everything?
Another essential question to consider—what types of insurance do you need? Should you still be carrying a life insurance policy if you’re in retirement? If your children are grown, independent adults, it could be time to drop or reduce your policy.
If you’re concerned about your future care, perhaps you want to add a long-term care policy.
Estate planning is about protecting yourself, your belongings, and your loved ones when you become unable to care for yourself. Your insurance coverage should reflect your wishes, working in tandem with the rest of your estate plan to reduce the financial burden on you and your loved ones.
Item #3: Reflect on Past Changes
A lot can happen in 12 months, especially these past 12 months. Have you had any major life events that could affect your estate plan?
Impactful changes on your estate plan could include:
- Marriage
- Divorce
- New in-laws
- Grandchildren
- Retirement
- Large inheritance or windfall
- Medical diagnosis
List out any changes you and your spouse have experienced over the past year, and we’ll help determine if you should make changes to your estate plan accordingly.
Nobody wants to forget a grandchild in their will, and taking the time to check for these changes now can help prevent such blunders later down the line.
Item #4: Organize & Review Documents
Should something happen to you tomorrow, does your family know where your important documents live? Do you?
Establish a safe, secure location where you can organize and store the relevant documents your family will need during the transfer process. Create digital copies (if possible) and give select beneficiaries access.
While you’re sorting your documents, review your current power of attorney, patient advocate, and joint ownership on accounts. If you haven’t yet established these, add this to your to-do list. These are the individuals who can speak on your behalf and in your best interest should you become incapacitated.
Our team can help you and your loved ones determine these designations while keeping potential tax considerations in mind. For example, creating joint ownership on bank or investment accounts can keep your assets protected from certain estate or inheritance taxes during the transfer process.
Item #5: Update Beneficiaries
Similarly, take some time to review and update the beneficiaries to your accounts. This could include insurance policies, retirement accounts, mutual funds, annuities, and more.
If you’ve gone through a life event like marriage or divorce, your current beneficiary designations may be outdated. Having an up-to-date beneficiary designation is crucial, as this person will help execute your final wishes. It may be difficult (or impossible) to correct errors in designations after your passing, and trying to fight it could cost time, money, and heartache for your loved ones.
Having your beneficiaries established now can create a smoother transition process and help your estate avoid probate. Something that, again, could otherwise cost your heirs time and money.
Bonus Item: Build Your Estate Planning Team
One of the most impactful items you can check off your estate planning to-do list is building the right team of trusted financial professionals. Having a knowledgeable professional at the helm can help ensure your estate plan is staying the course.
Whether you’re building your team from scratch or looking to grow your support system, Legacy Wealth Advisors is happy to help. We work with individuals and couples in retirement who are focused on optimizing and protecting their hard-earned wealth.
Don’t hesitate to reach out to our team to see how we can help navigate you and your loved ones through the estate planning process.
Advisory services are offered through Legacy Wealth Advisors, LLC dba Legacy Wealth Advisors, an Investment Advisor in the State of Michigan. The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Michigan or where otherwise legally permitted.
All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Legacy Wealth Advisors does not offer tax planning or legal services but may provide references to tax services or legal providers. Legacy Wealth Advisors may also work with your attorney or independent tax or legal counsel. Please consult a qualified professional for assistance with these matters.
