• Hannah

Don't Wait to Plan for Your Estate

Updated: Jan 29

For many of us, estate planning isn't the first thing we think of when it comes to financial planning. Most of us are more concerned about planning for unexpected expenses, major purchases, college expenses, and retirement. Furthermore, it's uncomfortable to think about death and what will happen to our things when we're gone. Nevertheless, most of us work hard to save up for our goals, and if we're honest, we would prefer our wealth continue to reflect our values even after we're gone. We want our hard-earned wealth to benefit those we love – be it our children, grandchildren, or charities engaging in work that we care about.


According to a survey conducted in 2019 by Caring.com, a senior living resource company, 76% of respondents agreed that having a will is important. Still, less than half of Americans surveyed actually have one in place. The surveyors also noted that the top reason given for not having a will is simply not having gotten around to creating one yet. Not surprisingly, the older someone is, the more likely they are to have a will. It can be easy for younger individuals to want to put this off, but having a will in place is a crucial part of effective financial planning and should be an essential document for anyone.

Regardless of how much wealth you consider yourself to have, having some sort of legal document in place that designates how your wealth will be inherited should be important to you. In the absence of such a document, the recipients of your wealth may very well end up being decided by the state without regard for your wishes should you pass unexpectedly. When it comes to estate planning, there are a few things to keep in mind, namely, what you want to happen to your money after you're gone.

If you're in the early stages of your wealth accumulation and just want to cover the basics, a simple will should do the trick. While there are templates available on the internet, it can be very worthwhile to consult a professional. You will have to pay more in fees, but having an estate attorney draft a document on your behalf will help ensure that your wishes are met in a manner that follows the laws in your state – since there are different estate laws in different states. In addition to having a will in place, it's also a good idea to review your beneficiaries on any financial accounts you may have, particularly retirement accounts. You want to make sure that your beneficiaries are up to date and that the way you have listed them will result in the proper distribution of your assets. You'll want to make sure to name all beneficiaries and not just one with the expectation that they will divvy up the account. Not only is it possible that they ignore your wishes and keep the account for themselves, but if they do end up divvying up the account, they could incur substantial taxes resulting in a lesser amount being received by your other beneficiaries. Instead, it is much more efficient to name all of the beneficiaries in the percentage and manner you wish them to inherit the assets.

If you're in the later stages of wealth accumulation and have built up a substantial amount of assets or have dependents that you'd like to make sure are provided for, it would be beneficial to engage with a professional. Spending a little more energy on ensuring you have an adequate plan in place will be worth it in the long run. Depending on your situation, it may help to create a trust to place your assets in that will help you avoid probate - the potentially costly and time-consuming legal process of proving out your will. A trust can also include provisions for guardianship and how you'd like your medical decisions to be made if you are incapacitated. It's essential to make sure that once the trust has been created, you title your assets in the trust name. Otherwise, those assets will not be governed by the trust provisions, and all that work will have been for not.


When it comes to estate planning, you should consult a professional who can work with the rest of your financial team to ensure that your financial objectives are being met in the most efficient manner possible.

A version of this article first appeared on sherwoodfp.com on June 28,2019. It is shared here through an agreement with the author.

"2019 Survey Finds That Most People Believe Having a Will Is Important, but Less Than Half Have One." Caring.com. 2019. Accessed June 29, 2019. https://www.caring.com/caregivers/estate-planning/wills-survey/.

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