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You Have a Will. Is That Enough?

will, estate planning, abilene

Roughly half of all Americans don’t have a will, so if you’ve already taken this vital step then congratulations are in order - you’re already ahead of the curve. In most situations, however, wills are necessary, but not sufficient to cover all the bases. Most people also need to think about having financial and health care powers of attorney in place, and some also need a more elaborate estate plan that helps avoid a drain on resources at the end of life, as well as some potentially ugly tax consequences for their families.

To over-simplify it, an estate plan is a more comprehensive approach to handling the distribution of your assets after your death or disability. Estate plans can save you and your successors substantial amounts of money in court costs, legal fees, and taxes. Here are a few things to consider when creating an estate plan:

Do you have/are you expecting children/grandchildren? This is one of the most important factors to consider when creating an estate plan. Beyond appointing a guardian to take care of minor children, you may also need to appoint a conservator who will manage the assets your successor(s) will inherit when they reach the age of majority. You may have assets that already contain a beneficiary designation such as a transfer on death (TOD) account. If not, then your will may be used to instruct who will receive such assets.

Minimize probate and maximize privacy. An estate plan that uses a living trust will allow your heirs to move through the administration process as quickly and efficiently as possible. With only a will, a process called probate must be used at your death. Information brought forward in probate court is public knowledge and all of the terms of your will plus the assets you own will become part of the public record. Also, probate can be very expensive. In most West Texas counties, probate can move along at a fairly fast clip. However, attorney’s fees and court costs can start to add up. Constructing an estate plan with an attorney before probate can help avoid most of these costs and loss of privacy.

Consider your digital information. One thing that’s often forgotten, but necessary in today’s digital age, is what happens to your online information after you die? Many of our day-to-day activities are conducted online and this may present issues for your family after you die. For example, if you invest or bank online, it can be an incredible hassle for your heirs to decode your online financial life. Consider storing your passwords in a safe place and then use power of attorney to allow your family to manage your online footprint.

There are several other factors to consider when constructing an estate plan, some of which can be quite complicated. If you or a loved one own sizable assets (really, anything more than $100,000, excluding one's home), you should work with your accountant, financial adviser, and attorney, to make sure you are ready for both the inevitable and unexpected changes that come in life.

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