It’s never easy to talk about money. It’s even harder to talk about what happens to your money when you are gone. For that reason, it is one of the most overlooked aspects of financial planning, even though it is one of the most important. If you haven’t planned your estate, it’s time to start.

It’s a gift for your loved ones

More than money, property of possessions, estate planning passes along peace of mind. The moments after a loved one’s death are the worst possible time to be talking about money. Preparing now means you can alleviate the stress and guesswork of where your assets go, what kind of service you want, and how best to honor your memory.

Their problems only compound if you don’t have a will, haven’t set beneficiaries, or established other legal documentation. Even if your family is unlikely to squabble over your assets after you pass, they will face significant hurdles. The probate process can take many months under the best of circumstances, keeping your assets locked away from your children and grandchildren.

Start with Beneficiaries and a Will

If you have a 401k or other retirement savings account, you have already established a beneficiary. If you didn’t, it’s pretty simple to do.

Beneficiary designations simply dictate who will receive the account assets upon your passing, but don’t overlook them. Your beneficiary designations supersede the directives in your will, so you will want to review them at least once a year, especially if you have a change to marital status, new children or grandchildren, or a dramatic change in your financial circumstances.

From there, it’s time to draft a will. Your will can spare your family needless taxation and can ensure your family gets experienced management assistance for your assets. If you have dependents, it is important to establish who will serve as guardian when you pass, or if you and your spouse become incapacitated.

As with beneficiary designations, you’ll want to revisit your will regularly.

Make your Directives Clear

This one potentially impacts you personally. If you are no longer able to make health care decisions, directives can relieve your family of an enormous burden.

When most people think of directives, they think of a living will, a written statement that outlines what kinds of treatment you are willing to submit to if you are incapacitated. But there is more to it than that.

A health care proxy designates someone to make medical decisions on your behalf. Make sure to use your state’s statutory forms and that all concerned parties, including your doctor, have copies. This will help to ensure your final wishes are carried out and prevent potentially explosive conflicts about the nature of your care.

Similarly, it is important to establish a power of attorney, which is like a health care directive, but for financial decisions. It lets you designate someone to step in and manage your finances should you become incapacitated. This is especially important if you are single, because otherwise a court will decide who serves as your financial guardian, and the guardian of your assets.

These are complicated, difficult decisions, and you shouldn’t hesitate to reach out to your financial advisor. A value they bring is to act as a neutral third party and shift some of the burden away from your family.

This article was originally published in the Pioneer Press. You may view the article here.


Bruce Helmer

Bruce Helmer

Co-Founder, Financial Advisor and Author, Speaker and Host of the "Your Money" Radio Show

Series 7 & 63 Securities Registrations,1 Series 66 Advisory Registration, † Insurance License Bruce has been in the financial services industry since 1983 and is one of the founders of Wealth Enhancement Group. Since 1997, he has hosted the “Your Money” radio show, a weekly program that focuses on delivering financial advice in a straightforward, jargon-free manner. Bruce also hosts with the "Mid-Morning" crew on WCCO-TV each Tuesday morning to...Read More