When many adults hear the words “estate planning,” they immediately assume it’s something their parents should be thinking about. But it’s worth considering at a young age, says Beverly Hobbs, AAMS®, an LPL Financial Advisor with Cobalt CU Wealth Management, especially if you’re a parent or guardian.
“We think of estate planning as planning for retirement, but it’s really not so much estate planning as life planning,” she says. “What happens if you’re not there? Who’s going to take care of your family and how are they going to do it?” Here, we’ll delve into what exactly should be on an estate planning checklist and why. Get the details below and then download our easy-to-use checklist to execute your plan.
When planning your estate, you’ll want to consider:
A will. Having a will that establishes where assets will go if one or both spouses pass is critical. You’ll need to designate a personal representative (executor) for the will. This doesn’t need to be an attorney, but it does need to be someone you trust to handle any financial obligations and other items associated with your will. Parent should also name a guardian for surviving children in their will. “It’s always advisable to talk with a trusted attorney to establish a will that outlines each member’s individual needs. We can then set up the financial account to meet those needs,” Hobbs says.
Life insurance. Another consideration is where survivors will get the income to support themselves at the same financial level. For instance, do you want to ensure your children can pay for college? For homeowners, parents with young children, or those who may owe significant debts or estate tax when they pass, life insurance is worth considering.
Another Cobalt CU Wealth Management Expert points out that, “Life insurance is a love language. It’s not for you, it’s for the people you love. Life doesn’t always go according to plan, so it’s important to think about those ‘what-if’ situations and make sure insurance coverage is part of your financial plan.”
Beneficiary forms. Having a named beneficiary for financial accounts and retirement plans means funds bypass the probate process and are automatically payable upon death to beneficiaries. If you haven’t named a beneficiary for retirement or other financial accounts, take the time to file the proper paperwork.
You’ll also want to revisit any beneficiary designations you set up a long time ago. Have your divorced or married since then? Do you need to designate a trust for minor children as the beneficiary? Take some time to examine the best option for you and talk to a lawyer if necessary.
Updated digital info. Once you’ve ensured your beneficiaries are up-to-date on insurance policies, IRAs, and other financial accounts, Hobbs recommends compiling a list of the accounts that includes websites, user IDs, and passwords. “And remember to include the user IDs and passwords for your social online accounts like Facebook, Twitter and LinkedIn, too,” she says. Having this information with make it much easier for survivors to manage your digital accounts. Of course, this is a highly sensitive list you’ll want to keep safe. To do that:
- We recommend handwriting the list. Anything you create electronically could potentially be tracked, even if you delete it.
- Keep the list in a secure spot like a safe that only someone you truly trust can access.
You could also use a reputable digital password “vault” like LastPass to house all of your info. Then you just have the password to that account to protect and pass along.
Power of attorney. Having a reliable power of attorney for finances allows your trusted agent (who doesn’t actually need to be an attorney) to sign contracts and financial documents on your behalf if you are unable to.
Health care directives. What are your wishes for health care if you become unable to make medical decisions? A health care declaration or “living will” and a power of attorney for health care help ensure your preferences will be adhered to.
A trusted advisor. Cobalt CU’s wealth management suite offers long-term planning services and the experts needed to guide the process. “We can help you check off the items on your estate planning checklist and assist you with all of your financial needs, including checking, savings, retirement accounts, and life insurance,” Hobbs says. “Each of these has a role in estate planning, and being able to talk to one person as opposed to having to talk to several people at different locations, makes it easier on the surviving family member.”
Get a jump on planning for the future by downloading our estate planning checklist today.