What To Do When Getting Your Estate Together

Although you may prefer not to think about the day when you will pass from this life to the next, planning for your estate is an important component of your financial plan. Estate planning involves determining how to manage and distribute your assets upon incapacitation or death. This planning includes creating your will, documenting your final wishes, and settling financial obligations, such as estate taxes. Most estate plans are set up with the help of an attorney experienced in estate law because of the complexity involved. Below are some tips and strategies to help you avoid common pitfalls as you begin thinking about your estate plan.

Avoid Common Estate Planning Missteps

• Name the right executor(s). Choose an executor who has the time, financial knowledge, patience, and interpersonal skills to handle this lengthy process. If you name one of your children as executor, you need to take into account the potential impact on family harmony and dynamics. Also, consider the executor’s ability to be impartial to all beneficiaries. Any disagreement among beneficiaries can lead to difficulties in settling your estate, which can extend the process both time- and cost-wise. Alternatively, you could consider choosing a neutral third party or selecting a trust company like Blue Trust to serve as an executor or co-executor of your estate.
• Keep your documents and beneficiaries current. If you decide to update a previous will (or trust) or create a new one, it’s very important to make sure your beneficiaries are updated as well. When you update your estate plan, whether it’s because you change your mind or because of a major life event, update your beneficiaries and make sure all assets are titled correctly.
• Specify who will receive certain valuable items. Some people assume that their children can easily decide how to divide certain items, but it can be confusing unless specifically noted in your estate planning documents. For personal property, make it very clear who gets what, especially when it comes to items with sentimental value. Include photos or videos along with descriptions of the items to eliminate confusion. It is unrealistic to name every single item you own, and we have found that most estate disagreements arise from the division of personal property. Having a family conference now may help you and your heirs determine the fairest disposition of your items later.
• If you have personal employees, include them in your estate plan. Consider including your housekeeper, personal assistant, caregivers, or long-time helpers in your estate plan, and establish a formula to determine how much severance each will get. Deciding on a severance plan avoids the heartache and hardship your helpers might feel if their salaries suddenly end.
• Discuss your plan with your beneficiaries. Whether it’s your children, your employees, other family members, or friends, thoughtful estate planning strategies can help ensure your home-going doesn’t put a strain on their time, resources, and relationships. If everyone knows what’s coming, your plan will be much easier to put into effect.

Make Your Wishes Known
Within your estate plan, we believe your home-going plan plays an essential role, especially during these uncertain times. Taking an active role in this process and planning ahead is a great gift that you can leave to your loved ones. Detailing your personal wishes for your funeral or memorial service and burial arrangements will help guide your family and friends when you are gone. Here are some things to consider:

• Funeral or memorial service. Where do you want the service to be held (church, funeral home chapel, graveside, or a combination)? What ministers or other speakers will conduct the service? Is there a military or fraternal organization that you would like to ask to participate? Do you want flowers or donations to a specific charity in lieu of flowers? Which music and musicians do you want to include? Are there any particular passages of Scripture, poetry, or other readings that you want read? And who would you want to serve as pallbearers?

• • Select your burial arrangements. Which funeral home will take care of your arrangements? What clothing and jewelry do you want to wear? Will the casket be open or closed? Will you be buried or cremated? If buried, which cemetery, plot, or mausoleum do you choose? What kind of marker will you have? If cremated, will you want your ashes buried or scattered? Do you want to be an organ donor? Since these decisions may have financial consequences, prearranging these services while your health is good and paying for them in advance can be helpful for your family left behind.
  • Write down information for your obituary. To help draft your obituary, write down the following for your loved ones: names of your parents; place and date of your birth; date of your marriage and name of your spouse (especially helpful if your spouse predeceased you or may be incapacitated); information about your education, military service, career, community service, church, clubs or other memberships; photo to include; names of close family members who preceded you in death and those who survive you. Finally, indicate the newspapers in which you want your obituary to appear.
  • Organize your material goods. Through the years, you have likely accumulated many things. With regard to estate planning, you can categorize these items in three ways: (1) financial assets with purely economic value; (2) legacy assets with nostalgic value; and (3) things that are meaningful to you but have little economic value or sentimental meaning to your heirs. Some of these sentimental items include photos of people and places to which your heirs have no real connection; old books or yearbooks; clothing worn on special occasions; and souvenirs or memorabilia.
  • Talk with your heirs about which sentimental items they’d like to keep. You may want to consult with professional appraisers on items that have economic value. As you sort through your things, take the time to share the stories behind them and label items such as photos.
  • Consider completing a life review letter. Stanford Medicine, an arm of Stanford University, has created a template to help individuals communicate meaningful information to loved ones. Their seven tasks of life review process helps people reflect upon and share key life experiences and the important relationships they have cultivated. You can find out more about this resource at www.med.stanford.edu/letter/friendsandfamily.

The process of creating your estate and home-going plans can seem quite daunting as there are so many decisions to make, both personal and financial. For this reason, Blue Trust has created a helpful resource to get the process started. Our Home-Going Packet contains checklists and guidelines to help you think through some of the topics discussed in this article. For more complex needs, we also have a seasoned Estate and Trust Planning team available to assist.

If you have any questions about planning for your estate or if you’d like a copy of our Home-Going Packet, please contact blog@bluetrust.com to connect with a Blue Trust advisor.

This article was originally published in our Wisdom for Wealth. For Life. quarterly client newsletter and has been edited for this blog. To see this and other editions of the newsletter, please click HERE. If you would like to add your name to our newsletter mailing list, please contact your Blue Trust advisor or email us at blog@bluetrust.com.

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