Estate Planning as part of Your Retirement Plan

Included in a well crafted Retirement Plan will also be an Estate Plan. Once an estate plan has been created, it is equally critical to ensure that it is updated periodically and properly maintained. After all, an estate plan that is outdated will not reflect your final wishes should your circumstances have changed. Keeping your estate plan up to date will also help relieve stress that your loved ones may otherwise unnecessarily experience.

There are numerous examples of celebrities who have passed away without wills or other end-of-life documents in place. Prince is one of these examples. He passed away without having a will in place. However, it is important to note that everyone, regardless of income level or net worth, needs an estate plan, not just the celebrities or the ultra wealthy. Ensuring that your financial affairs are in order before you pass away will ensure your assets go where you want them to go and that your last wishes will be implemented.

Steps to consider when developing your Estate Plan

Develop Your Estate Plan as part of your Retirement Plan with Runey & Associates Wealth Management
  1. Inventory Your Assets and Determine the Financial Value:
    • The critical first step to developing a comprehensive estate plan is to inventory your financial assets, real estate, etc. as well as potential intangible assets (like patents or copyrights). All items that require decisions to be made about them should be included in this inventory list. Debt items should also be taken into account to ensure completeness of the list.
    • Then determine and assign financial values to each asset.
    • Also remember to inventory, and update if needed, beneficiary designations on IRA accounts, life insurance and group benefits.

  2. Choose Beneficiaries and Decision Makers:
    • Beneficiaries are the future recipients of your assets (funds, trusts, property, etc.). In most cases this will be a spouse, child, other relatives or friends. Beneficiaries can be decision makers as well.
    • A Decision Maker should be someone that you trust with the responsibility of administering the assets of your estate. They will also need to execute any remaining financial obligations and will make sure your final wishes are carried out as intended.

  3. Should I set up a Revocable Trust?
    • Setting up a trust may provide an alternative way for you to pass your assets on to your beneficiaries. There are a few different types of trusts; the Revocable Trust is by far the most popular trust.
    • A revocable trust allows you to manage your property, and make changes to the trust, during your lifetime. After you pass away, the trust becomes irrevocable and no changes can be made.
    • Revocable trusts also provide additional privacy and control as your assets will be passed to your beneficiaries without probate (i.e. no court proceedings required where your documents would otherwise become open to the public).

  4. Set up a Will and appropriate End-of-Life Documents:
    • When you pass away your assets will be distributed according to your will, the terms of your trust, as well as by beneficiary designations (i.e. retirement accounts, insurance policies). It is important to make sure you understand all the different parts of your estate to make sure you have the proper beneficiaries assigned to each document.
    • It is also important to consider having other end-of-life documents properly executed. These may include a living will, dictating decisions related to what should or should not be done to keep you alive, health care power of attorney, durable power of attorney, letter of intent, and guardianship designations.

Steps to consider for updating and maintaining your Plan

So, now that you have developed an estate plan it becomes equally important to maintain and periodically update your plan. Below are some simple steps to make sure you keep your plan current:

Maintain Your Estate Plan as part of your Retirement Plan with Runey & Associates Wealth Management
  1. Regularly review and update:
    • Even after you have finalized your Estate Plan, major life events will continue to take place. A change in marital status, having children or grandchildren, moving to a new state or purchasing a second home should all be incorporated into your plan.
    • Changes in estate tax legislation can also be a trigger for review and update of your plan.
    • To ensure your wishes for your family are in order, make sure to update your plan when these life, or legislative, events take place.

  2. Make extra copies and keep your originals in one central place: 
    • Create electronic or physical copies of all of your estate planning documents. If a document is misplaced or damaged you can easily retrieve a copy.
    • Keep copies of your estate planning documents in a different location from the original documents. A safety deposit box or an attorney’s office may be suitable.
    • To reduce the risk of losing any of the key information included in your estate planning documents, consider placing the original copies of your documents in one location. To the extent applicable to your situation, this could include: will and/or trust, durable power of attorney, beneficiary designations, letter of intent, healthcare power of attorney, and guardianship designations.

  3. Set a formal review schedule:
    • Establishing a schedule for reviewing your estate plan is a great way to ensure your plan is, and stays, up-to-date. It will also help minimize the risk of forgetting important life events or asset acquisitions that should be incorporated into your estate plan.
    • Reviewing and revising, as necessary, annually or biannually is a good rule of thumb.

  4. Inform the appropriate people in your life:
    • To avoid future stressful situations for the people you love, be sure you inform them of the documents you have and what their roles may be. This would be family members, executors, trustees, agents, etc. identified in your estate planning documents.
    • As you make updates to your estate plan, inform them again in case their roles have changed.

Estate planning is an important part of your Retirement Plan. Making sure you have your house in order will provide relief both to you and the ones you leave behind.

Disclaimer: Please note that the above should not be construed as a template for an Estate Plan, but as a general guide for how to get started and how to maintain your plan. As always, please reach out to us should you have any questions or concerns regarding your estate planning needs. We can help guide you through what tools, such as wills, trusts, and additional beneficiary designations, your plan will need. We will also work together with your current estate planning attorney, or work with you to establish a relationship with an estate planning attorney, to ensure your wishes will be properly carried out.