Three Questions to Help You Develop Your Estate Plan
A Comprehensive Strategy Ensures Your Wishes Will be Honored
Many people fail to develop an estate plan because it’s never comfortable to think about the end of your life. Taking the time to think about who would raise your children or who should manage your assets can be difficult, but it’s necessary. If you don’t, then you lose your voice in the matter completely. Without a comprehensive estate plan in place, your assets could end up in court and divvied up depending on what a probate judge thinks is best.
There are many aspects that should go into an estate plan, especially if you want to be sure that you’re taking care of your loved ones and leaving a positive impact on the world once you’re gone. As you begin to think about the legacy you want to leave behind, these three questions can help you take stock of your family’s dynamics and your values.
How do I want to divide my assets?
Most people leave their assets to their surviving spouse if they have one. If you’re single or you outlive your spouse, then you’ll be thinking about the next generation. It may seem like the easiest option to simply leave your assets to your oldest child or the one that you’re closest to. However, that’s usually not the most effective or beneficial choice to make. It’s hard to predict what will happen in the wake of your death and there are many factors that could get between your chosen heir and their best intentions.
Rather, it’s best that you’re as clear as possible about what you want to happen to your assets. If you want some of your assets to be donated to causes you’re passionate about, be clear about how you want that to happen. Instead of leaving it to your heir(s) to decide how much of your money should go to which charities, if any, decide for them. Having an intentional giving strategy as part of your estate plan can help ease the tax burden placed on your heirs, while also ensuring that your philanthropic wishes are followed even when you’re no longer here.
SEE ALSO: The Benefits of Gifting Your Grandchildren Trusts
What relationship do my heirs have with money?
Everyone has their own values and attitudes when it comes to money. There’s a chance that one of your heirs may see a large inheritance as a chance to find solid financial footing that they then plan to nurture and grow from. Conversely, another heir may look at it and see a lavish vacation or a luxury sports car.
Because of this, it’s important that you don’t leave the division of your estate to one of your heirs to figure out. It’s up to you to decide a fair division based on what you know each of your heirs’ relationship with money to be, what they hope to achieve in their lives, their commitment to philanthropy, and their level of responsibility. It might be awkward or tense to explain the thought pattern behind your decisions, but the clearer you are, the less surprise and hurt feelings there will be later.
What is my family mission statement?
Estate planning is about so much more than simply protecting your assets or asserting your will. It’s about sending a message to you heirs that says, “This is what our family is about, and this is what we value.” It’s about your legacy.
That could mean using your assets to create a charitable organization or trust that your heirs will manage. It could also mean including videos or letters in your will that you can leave behind.
Thinking in terms of your family mission statement can help you with this part of your planning. Some families may work together on a mission statement that will guide the entire family towards living a more generous and impactful life. The more aligned your estate plan is with that mission statement, the more empowered your family will feel about honoring your legacy.
SEE ALSO: The Six-Step Estate Plan
Concluding Thoughts
While it is unpleasant to think about making a will, having your estate in order before something happens is critical if you want your wishes to be honored. Perhaps the greatest benefit of having a solid estate plan in place is the peace of mind you receive knowing that your wishes will be fulfilled even if you cannot voice them. There’s a deep security in knowing your family will be taken care of and your legacy will be upheld.
There’s much that goes into estate planning, so having a professional you can trust in your corner can help ensure that you’re utilizing all the options available to you. At Andersen Wealth Management, we work with each client to create a comprehensive estate plan based on their current financial situation and projected future wealth. If you have questions about your estate plan, please contact us today.