Beyond the Will: What a Complete Estate Plan Actually Covers with Tamara Block

TAMARA BLOCK

Beyond the Will: What a Complete Estate Plan Actually Covers

Estate Planning: Preparing for the Future

Estate planning is something many people put off. Wills, probate, powers of attorney, and inheritance may not seem urgent when life is going smoothly. But when a death, illness, incapacity, or major family change occurs, having a plan can make an enormous difference.

Estate planning is about more than deciding who receives your property after you die. A comprehensive plan can also determine who will make important financial or medical decisions if you become unable to make them yourself. It can provide loved ones with clear instructions and reduce uncertainty during an already difficult time.

One common misconception is that having a will automatically allows an estate to avoid probate. Generally, a will provides instructions for how certain property should be distributed, but it may still need to go through probate. Probate procedures vary by state, but they can involve validating the will, identifying assets, addressing debts and creditor claims, and distributing property to beneficiaries.

Not every asset necessarily passes through probate. Certain retirement accounts, life insurance policies, bank accounts, and other assets may pass directly to named beneficiaries. Property owned jointly may also pass to a surviving owner depending on how it is titled and the applicable law. Trusts and other estate-planning arrangements may provide additional ways to transfer assets.

That is why creating a will is only one part of a complete estate plan. Beneficiary designations should be reviewed regularly to make sure they remain consistent with your wishes. An outdated beneficiary designation can sometimes produce a result that differs from what you intended in your will. Reviewing these designations can help ensure that financial accounts and insurance policies are coordinated with the rest of your estate plan.

The way a will is prepared and executed also matters. Legal requirements for creating a valid will vary from state to state. Requirements may involve witnesses, signatures, notarization, or other formalities. Using an online form or making handwritten changes to an existing will may seem simple, but an improperly prepared document can create uncertainty and potentially lead to disputes after death.

An estate plan should also be reviewed as life changes. Marriage, divorce, the birth or adoption of a child, the death of a beneficiary, the purchase of significant property, changes in finances, or the creation of a business can all be reasons to revisit your documents. Even without a major life event, periodically reviewing an estate plan can help ensure that your documents still reflect your current goals.

It is equally important to consider what happens when someone dies. If you are named as an executor, personal representative, or trustee, you may have responsibilities beyond distributing property. Depending on the circumstances, you may need to locate and protect assets, identify debts, address creditor claims, communicate with beneficiaries, complete required filings, and distribute property according to the governing documents and applicable law.

Executors should therefore be cautious about distributing assets too quickly. An estate may have outstanding debts, expenses, taxes, or creditor claims that must be addressed before property can properly be distributed. Because deadlines and procedures vary by state, an executor may benefit from obtaining professional guidance before taking significant action.

Good estate planning also involves communication. Family members do not necessarily need to know every detail of your finances, but the people who may need to act should know that an estate plan exists and where important documents can be found. Your chosen executor should understand their role, and trusted individuals should know how to locate information about financial accounts, insurance policies, real estate, business interests, and other important assets.

It is also important to plan for incapacity. Financial powers of attorney and health care directives can allow you to designate trusted people to make certain decisions on your behalf if you become unable to do so. Without appropriate documents, family members may face additional legal procedures to obtain authority to manage certain affairs.

Ultimately, estate planning is about making thoughtful decisions before your family is forced to make them during a difficult time. No plan can eliminate every potential complication, but current documents, coordinated beneficiary designations, and clear instructions can make the process easier.

Estate planning is not a one-time task. It should evolve as your family, finances, property, and goals change. Taking time to review your estate plan now can provide greater peace of mind and help ensure that your wishes are understood and carried out as effectively as possible.  And, doing all of this on your own can be daunting and time consuming, so a good estate planning attorney is crucial.