‘Step-by-step’ approach can ease estate-planning

Published 4:30 pm Friday, May 22, 2015

Like many people, you may enjoy investing. After all, it can be invigorating to put away money for your future, follow the performance of your investments and track the progress you’re making toward your long-term goals, such as a comfortable retirement. However, you might be less excited about doing estate planning, dreading the perceived time, effort and cost. Yet, you can make the entire process more manageable by breaking it up into specific tasks.
What are these tasks? Everyone’s needs are different, but here are a few suggestions that may be applicable to your situation:
▶ Purchase life insurance. If something were to happen to you, would your family be able to stay in the house? Would your children be able to go to college? You should have sufficient life insurance to take care of these and other essential needs. You might hear about various “formulas” for how much insurance you should purchase, but you may be better off by working with a financial professional — someone who can evaluate your assets, goals and family situation, and then recommend an appropriate level of coverage.
▶ Draw up your will. For most people, a will is probably the most essential estate-planning document. Regardless of the size of your estate, you need a will to ensure that your assets and personal belongings will be distributed according to your wishes. If you die intestate (without a will), your belongings will be distributed to your “heirs” as defined by state laws — and these distributions may not be at all what you had in mind.
▶ Consider a living trust. Depending on your situation, you may need to go beyond a will when drawing up your estate plans. For example, you might want to create a living trust, which can allow your assets to go directly to your heirs, avoiding the public, time-consuming and expensive process of probate. A living trust offers other benefits, too, so you may want to consult with a legal professional to learn more about this estate-planning tool.
▶ Check beneficiary designations. The beneficiary designations on your insurance policies and retirement accounts, such as your IRA and 401(k), are powerful and can even supersede the instructions left in your will. So it’s in your best interests to make sure you’ve got the right people listed as your beneficiaries. Over time, you may need to update these designations to reflect changes in your family situation.
▶ Make final arrangements. Whenever you pass away, it will be a stressful time for your loved ones. To ease their burden, consider establishing a “payable-on-death” account at your bank, and then funding this account to pay for your funeral and related expenses.
▶ Share your plans. The most comprehensive estate plan in the world may not be of much value if nobody knows of its existence. Share your plans with your loved ones and heirs. It’s important that everyone knows their roles in carrying out your wishes.
When dealing with any estate-planning issues, you’ll want to consult with your legal and tax professionals. And by taking a step-by-step approach, you can keep the process moving forward — without feeling that you’re being overwhelmed.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor
Edward Jones, its employees and financial advisors are not estate planners and cannot provide tax or legal advice.

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