Last month’s column continued to identify necessary steps to achieving financial security and protecting your assets by establishing an estate plan.
Specific recommendations included identifying family members or friends to serve in the roles of executor, financial durable power of attorney, healthcare power of attorney and guardian. Once these trusted people are identified, the suggestion was to ask them directly to serve in these roles.
This month’s column focuses on how proper planning can assist the person you select in fulfilling the role of your executor. An executor is the person that you entrust to carry out your wishes pertaining to assets and dependents.
Asking someone to serve is a good first step. However, an important next step requires you to identify this person in a legal document known as a will. A will can include very specific instructions to assist and ease the burden placed on the executor.
While many may not consider their assets to be significant enough to warrant the execution of a will, having one in place not only ensures that your wishes are fulfilled it can also ease the emotional burden for your family and friends.
If someone dies without a valid will he or she is said to have died “intestate,” which means that court-appointed administrators will compile all of your assets, pay any bills or expenses, and distribute the remaining assets to those parties they deem to be your beneficiaries.
Through a process known as probate, a court-appointed administrator will make these determinations — not you. This administrator is tasked with locating your heirs, and usually heirs include surviving spouses, children, and parents. Then the probate court — which does not know your wishes — will determine which assets are to be distributed and to whom. Do you want a stranger making these decisions for you?
What if you promised a special piece of jewelry or keepsake to a family member? A will can document this wish. What if your desire is to continue funding charitable organizations with a portion of your financial assets? A will can document this wish.
If you do not have a will, this month’s action is to hire an attorney specializing in estate planning. As an expert, your attorney will lead you through important considerations to include in your will. So that the initial meeting with the attorney is most productive, review online resources and fill-out checklists in advance to identify many of your wishes.
Often such a review leads to discussions with friends or family. Have these conversations in advance of your meeting with the attorney. If you do not know of an estate planning attorney, ask friends, family or other professionals for a referral. The relationship you establish with this person as a trusted advisor is very personal.
If you already have an estate-planning attorney and a will in place, this month’s action is to confirm that you have executed the documents and also review the details to ensure that what has been executed continues to reflect your wishes. Estate tax laws have changed recently, which is another reason for review and possible consult with your attorney.
The cost of meeting with an estate planning attorney should not deter you from taking action to protect your financial assets and to be assured that your wishes for distribution to family, friends or charities are fulfilled.
Next month: Final Estate Planning Recommendations.
Beth Stegner Peabody is CEO of Stegner Investment Associates, Inc., and a graduate of Sacred Heart Academy.