Estate Planning Tips for the New Year

Jan 5, 2021
Estate Planning

Now that we are nearly ready to ring in the new year, it is a good time to take a step back and take stock of your estate plan. Many things have changed over the past year (and there's a great deal of uncertainty about the future in many aspects), so taking the time to ensure that you have everything in order is paramount. An updated estate plan is a key component in creating peace of mind in 2021.

Step One: Write a letter 

One of the most crucial (and overlooked) aspects of an estate plan is a letter of instruction. You will want this to contain vital information for your heirs in the event that there is an emergency. For instance, if you are medically incapacitated, you are going to want your heirs to be able to get in contact with your professional advisors (wealth managers, insurance agents, CPA, etc.), understand how to access online information (make sure this includes passwords), where your insurance summaries are, where your power of attorney documents are, and so forth.

Basically, you want this letter to be the overarching guide to your estate in the event that something unforeseen happens in 2021. As 2020 taught us, it is always best to prepare.

Step Two: Share your passwords 

We mentioned this in step one, but it is so important that it is worth mentioning again. If your heirs do not have access to your online accounts, they are going to have a very difficult time with the inheritance process. You may wish to consider using a password management app to keep everything in one place and sharing the access information with your executor.

Step Three: Outline and purchase any accoutrements you wish for your death 

If you are planning on a cemetery burial for your funeral, it is not a bad idea to purchase the burial plots in advance. Making arrangements for this prior to your death will help your children through what is very likely to be an emotionally-difficult time. You should put any information related to burial wishes or plots in the letter of instruction.

Step Four: Take a home inventory 

This is particularly important if you have expensive collections or items that you are planning on passing down (like artwork or classic cars, for instance). Taking proper stock of everything that you own and getting potential items of value appraised will help you organize your estate plan in a practical manner. This is also very helpful for general insurance purposes, in addition to estate planning.

Step Five: Revise your beneficiary designations

Assuming that you have a spouse, it is highly likely that your primary beneficiary for any trusts you have is that person. However, it is always a good idea to check in on your beneficiary designations each year and make sure they reflect the most up-to-date information. (For example, if you have not looked at your estate plan for a few years… do you have all of your children noted as secondary beneficiaries, even the youngest?)

Proper financial and legal hygiene can save you and your heirs major headaches in the future. Contact us today at AmeriEstate to learn more.