Creating an estate plan is an important step toward protecting yourself, your loved ones, and the legacy you hope to leave behind. We commend you if you have already executed one or more estate planning documents, such as a Will, Trust, Power of Attorney, or Health Care Directive. However, estate planning does not end once the documents are signed. There are several additional steps you can take to help make future transitions and unexpected life events less stressful for the people you care about most. Below are five important actions to consider after your estate planning documents have been completed.
1. Fund Your Trust
Creating a trust is an important step, but signing the documents alone is not enough. To receive the full benefits of your trust, your assets must also be properly transferred into the name of the trust. This process is commonly referred to as “funding” your trust.
Depending on your estate plan, funding your trust may involve recording a new deed for real estate, updating bank or investment accounts, or completing planned lifetime gifts or transfers.
It is also important to remember that assets placed into a trust still require ongoing management and financial support. For example, if your home is transferred into your trust, the trust should also have access to sufficient funds to help cover expenses such as property taxes, insurance, maintenance, and repairs. Proper planning can help ensure that assets held in the trust continue to be managed smoothly during your lifetime and after your passing.
2. Review Your Beneficiary Designations
Beneficiary designations should be reviewed every few years and after major life changes such as marriage, divorce, or the birth of a child. It is important to ensure these designations still reflect your wishes and align with your estate plan.
This includes reviewing the beneficiaries listed on your life insurance policies, retirement accounts, annuities, bank accounts, and investment accounts.
For example, someone may update their Will or Trust but forget to remove a former spouse as the beneficiary on a retirement account. As a result, the account could still pass directly to the former spouse instead of the intended loved ones. Although it is your responsibility to make updates, your estate planning advisors can help review your beneficiary designations to ensure they remain current.
3. Create a Legacy Notebook
A legacy notebook can help your loved ones manage important matters during an already stressful time. This notebook should contain important information and documents that your trusted family members or decision-makers may need in the event of an emergency, incapacity, or passing.
Your legacy notebook may include:
• Copies of your estate planning documents;
• A list of important contacts, including family members, close friends, and professional advisors;
• Information about bank accounts, insurance policies, retirement accounts, and other assets;
• A list of recurring bills, debts, and automatic payments;
• A list of all real estate, business interests, and other valuable property, including relevant information about each asset; and
• Instructions for accessing important documents, keys, or digital accounts
Be sure to store your legacy notebook in a secure location and make sure a trusted person knows how to locate it if needed.
4. Automate Certain Retirement Distributions and Gifts
If you are required to take Required Minimum Distributions (RMDs) from a retirement account or regularly make annual gifts to loved ones, consider setting these payments up automatically through your financial institution when appropriate.
Scheduling these distributions earlier in the calendar year can help ensure they are completed and reduce additional stress for your loved ones if something unexpected happens.
For example, if a person passes away before taking their full RMD for the year, their beneficiaries may later have to determine what amount remains unpaid and coordinate with the financial institution to complete the distribution. Likewise, if annual gifts were intended but never made before the person’s passing, that opportunity may be lost for that year.
Planning ahead and automating certain recurring transactions can help simplify matters for your loved ones and keep your financial and estate planning goals on track.
5. Plan Your Funeral and Communicate Your Wishes
Planning your funeral arrangements in advance can ease emotional and financial stress for your loved ones during an already difficult time. Consider documenting your preferences regarding burial or cremation, funeral or memorial services, obituary information, and your preferred funeral home.
This step can be especially important for individuals with non-traditional family structures, blended families, unmarried partners, or chosen family relationships, where disagreements or confusion may arise if wishes are not clearly communicated in advance.
You may also want to consider purchasing a pre-need funeral policy to help cover expenses and reduce financial burdens on your loved ones.
Most importantly, talk with your loved ones or someone you trust about your wishes and where important information can be found. Clear communication now can help minimize conflict, confusion, and uncertainty later.
Estate planning should address the full picture of your life, finances, relationships, and long-term goals. For many individuals and families, this process works best when there is a team of trusted professionals involved, such as an attorney, financial planner, and tax professional.
While your attorney can help prepare the legal documents, it is equally important to communicate your wishes with your loved ones and trusted decision-makers. Clear communication and thoughtful planning can help reduce confusion, conflict, delays, and unnecessary expenses in the future.
One of the most important goals of estate planning is to provide peace of mind for both you and the people you care about most.
To learn more about how our firm can assist with your estate planning needs, please contact us at (336) 805-6200 or visit our website.
