Do you have a will or living trust in place?
Having a will or trust in effect will help you have a plan in place for how to pass property to heirs. There are several differences between the two, such as the following – a will comes into effect upon the testator’s death and must go through probate, while a revocable trust could become effective before the testator’s death and is not subject to probate. In our blog, “Living Trust vs Will: Key Considerations for Planning Your Estate,” we provide some factors for you to keep in mind when deciding whether a will or revocable trust may make more sense for you.
Do you have healthcare documents in place?
Healthcare documents spell out your wishes for health care if you become unable to make medical decisions for yourself. They also authorize a person to make decisions on your behalf if that should prove necessary. These documents may include a living will, a power of attorney agreement, and a durable power of attorney agreement for healthcare.
Do you have financial documents in place?
Certain financial documents can outline your financial wishes. If you become unable to make decisions for yourself, these financial documents can be structured to empower a person to make decisions on your behalf. These documents may include joint ownership, durable power of attorney, and living trusts.
Have you filed beneficiary forms?
In some cases, naming a beneficiary for bank accounts and retirement plans makes these accounts “payable on death” to your beneficiaries. In other cases, you will need to fill out a “Payable on Death” form.
Do you have the right amount and type of life insurance?
When was the last time you assessed your life insurance coverage? Have you compared the life insurance benefit with your financial obligations? Keep in mind that several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder may also pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
Have you taken steps to manage your federal estate tax?
If you and your spouse have more than $27.22 million in assets (for 2024), you may want to consider taking steps to manage federal estate taxes, which will be due at the second spouse’s death.1
Have you taken steps to protect your business?
Do you have a succession plan? If you own a business with others, you may also want to consider a buyout agreement. At Trust Point, we can create a plan that gives you control over the when and the how of transitioning your business so your business sale is successful.
Will your heirs be able to locate your critical documents?
Your heirs may need access to the specific documents you have created to manage your estate. These documents may include:
- Your will
- Trust documents
- Life insurance policies
- Deeds to any real estate, and certificates for stocks, bonds, annuities
- Information on your financial accounts and safe deposit boxes
- Information on your retirement plans
- Information on any debts you have: credit cards, mortgages, and loans.
Our Information Organizer is a great resource to keep all of your important personal and financial information organized. Request your copy.
Note: Power of attorney laws can vary from state to state. An estate strategy that includes trusts may involve a complex web of tax rules and regulations. Consider working with a knowledgeable estate management professional before implementing such strategies.
1. IRS.gov, 2024
