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Estate Planning Basics

Oct 01, 2024 | Heather Krause


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Estate planning is an important part of your overall financial plan. Learn about some of these Estate Planning tools you should consider as part of your overall plan.

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October is National Estate Planning Awareness month. One thing I have learned over the years is the importance of having ‘your house in order’ before something catastrophic happens. This might sound like an overwhelming topic, but it really comes down to a few simple things that you can do today to save your family, friends and loved ones from second guessing what your wishes are and avoiding unintentional outcomes. Estate planning takes the guess work out and provides a roadmap of what you want done, both while alive and at your death.

We recommend having the following documents in place before you actually need them:

  • Powers of Attorney (POA). POAs are in effect during a person’s life and cease when the person dies. Typically there are two separate POA documents: one for financial decisions, and one for healthcare/medical decisions. Choose your POAs carefully—these documents enable someone(s) you trust to be in charge of your financial affairs and/or medical decisions if and when you relinquish your ability to make these decisions, or you become incapacitated—often a triggering health event—as defined by the document or legal system. It is therefore best to have a Will in place prior to invoking a POA, so wishes are understood and the POA can simply execute your plan. There is a tremendous responsibility expected of those who are asked to be a POA, and agreeing to do so should not be taken lightly. We recommend all POAs read this informative booklet to better understand the role and responsibilities of a POA.  MANAGING SOMEONE ELSE’S MONEY Help for agents under a power of attorney (consumerfinance.gov)
  • Medical Health Care Directive. Also in effect during a person’s life, this document informs health care professionals and loved ones what your wishes are, providing guidance regarding measures you wish to be/not to be taken, such as providing CPR and/or artificial means of keeping you alive.
  • Will. A Will is a document that becomes effective at your death. It designates who you’d like to settle your affairs after your death (the Executor), and how and to whom your assets should be distributed (to the Beneficiaries). This document should be updated when you have any major life event, such as marriage, divorce, children, grandchildren, when you change states, or when estate laws are changed. For more information on this topic, please check out the Wills, Probate & Estate Settlement fact sheet (rbcwealthmanagement.com)
  • Beneficiary Designations and titling of accounts. Any account that has a designated beneficiary (i.e., retirement account or life insurance policy) will go to that beneficiary listed, not per your Will. Joint accounts with rights-of-survivorship pass differently than tenants-in-common. All beneficiary designations and account titling should be reviewed periodically to ensure alignment with your Will. You can find more information on this topic by checking out the Estate Planning Basics Fact sheet (rbcwealthmanagement.com)

Additionally, working with professional advisors—financial advisor, estate attorney, CPA—can better assure potential pitfalls and unintended consequences are understood and avoided, so your wishes are clear and will be followed. We also recommend introducing your POA(s) and future Executor to your professional advisors to answer any questions they may have and ease the future transitions.

To get started with your Estate Planning needs, please reference the Financial Wellness Checklist (rbcwealthmanagement.com) and the Estate Planning Checklist (rbcwealthmanagement.com) that you may find helpful. Please reach out to me with any questions and how we may be of help with your Estate Planning needs.

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Wealth planning

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