Estate planning, next to retirement planning, is an important piece in safeguarding your assets. While the latter focusses on your quality of life after work, the former looks to how your loved ones will survive once you’re gone.
“Of course, people don’t want to think about their mortality, but it’s a fact of life,” explains Richard Cayne of Meyer International. “This is an important eventuality that everyone needs to take care to plan.”
Are you sure all your assets are covered in your will?
You may treasure your bumper sticker collection, but have you taken account all your assets? There are those items of sentimental or emotional value you may want to ensure go to the proper beneficiary. Even these items, along with real estate and other “valuable” assets, should be assessed. But not considering all your assets may impact tax and other exposures for your heirs.
Most people have had more than one job, so it is likely that they have more than one retirement account. And although it seems unlikely, is it possible there is one or more bank accounts you’ve forgotten about?
Furthermore, there is a misconception that certain instruments such as life insurance or retirement accounts are not taxed the same as “regular” assets. Depending on the jurisdiction, this is not the case.
Is all the information about your assets listed properly in your will?
When it comes to something as important as your assets and your family, every little detail does count. Since you will no longer be available to explain or fill in any gaps, you need to make sure that not only are your instructions understandable, but that your assets are identified fully.
You may know that “all my bank accounts” may not be enough information, but have you recorded the exact account information as in the financial institution’s records? This will go a long way to expediting your instructions and easing the process for your heirs.
Get professional advice to avoid problems
There may be some cases where a DIY will is a workable solution, but do you want to take that risk? If you have any concerns, it is best to contact a trusted professional to help you take inventory of your assets and on how best to handle your estate.
Estate planning is a topic that everyone should consider. Unfortunately, many consider it a difficult topic to ponder, let alone act on.
“Often people will leave their wills until it’s too late, or they’ll do it once, quickly, and think it’s all covered,” explains Richard Cayne of Meyer International. “But there are many factors involved that need to be addressed and that need to be revisited to ensure that loved ones are cared for.”
Wills should not be breezed through or forgotten
It is understandable that the thought of our own mortality gives most people pause. But, regardless whether you have an extended family with an extensive list of assets or whether you’re single with very little saved up, you should have a will. Everyone should consider who they are leaving behind and how best to help them after your passing.
Estate planning can be complex, but there are some simple stumbling blocks that you should avoid, which should simplify the process.
Not planning enough almost as bad as not planning at all
Not planning at all: There are so many pitfalls for your loved ones and beneficiaries if you die without your estate being in order. For those with limited assets, you may think that the state may sort it all out for you, but do you want to rely on government regulations? Every jurisdiction has a variation of inheritance laws that will mete your assets out to your family, after taxing them, of course.
Not planning enough: Hand-writing a document, leaving your spouse “everything”, bequeathing your children lump sums, loosely describing your assets – for someone who is reluctant to spend to much time contemplating a will think that these are acceptable alternatives. Often, these half-hearted efforts will not be considered as legally binding, which has the same effect of not having written a will at all.
Find a trusted adviser to make sure your wishes are met
You’ve worked hard to care for yourself and for those whom you love, why not make sure that they are taken care of after you’re gone? A trusted adviser will help you navigate the potentially complex issues when it comes to estate planning.