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There are decisions you can make through the estate planning process that could make a world of difference to your beneficiaries. Because each step is so critical, it’s highly recommended that you work with an estate planning attorney. They can help you understand your state’s laws, write your will, create trust documents, review your estate-tax situation and more.
If your employer offers our Financial Counseling as a benefit, your Ayco advisor can walk you through this process. They will act as an extension of your estate planning team and can provide resources to prepare you for your meeting with an attorney.
Make a list of assets and accounts and review your beneficiaries.
Your beneficiaries can be family members, friends and potentially charities. Be sure to review your beneficiaries if you get married or divorced, have new additions to your family or if a beneficiary passes away.
You generally choose beneficiaries for:
Look at your state’s estate laws on taxes and wills.
The federal government may tax the value of a property when the owner passes away, but this generally only applies to very large estates. In 2020, the amount exempted from federal estate taxes is $11,580,0001 and the top federal estate-tax rate is 40% and only applies above the exemption.
Even if your estate won’t be subject to the federal estate tax, it could be subject to state-specific taxes. These laws differ by state, so be sure to do your research. Resources like the Tax Foundation can help you get started, but an estate planning attorney may be your best source of information. If your employer offers Ayco as a benefit, we can help you understand the steps needed to get your estate plan in order.
Might a trust make sense for you? There are a few key differences between wills and trusts to keep in mind as you make your decision.
Consider advance directives.
As you prepare your estate plan, you should think about how your wishes would be carried out if you were incapacitated and unable to make decisions for yourself. This includes establishing a living will, a healthcare proxy and power of attorney.
A living will outlines the life-saving or –sustaining care you want taken in case of a serious medical situation where you are unable to direct your treatment plan. In many cases, living wills are used to avoid the undesired prolongation of life. Be sure to look into your state’s specific laws, but generally, you’ll need to provide your living will to your physician for inclusion in your medical records.
Your chosen healthcare proxy can be a family member, friend or other relation who is aware of and agrees to carry out your medical wishes if you can’t. Be sure to thoroughly discuss your beliefs and values about life, sickness, medical treatment, suffering and death with your healthcare proxy so they can make decisions on your behalf.
Power of attorney
The person you give power of attorney to makes financial decisions on your behalf. This can also cover your company benefits. If you give control of your company benefits, be sure to contact your plan administrators to determine if any specific forms are necessary.
Write a letter of instruction.
Your letter of instruction (which can be recorded rather than written if you choose) is included with your will and helps your family settle your affairs. The contents of your message depend on your unique situation, but typically include:
Don’t feel like you need to complete your plan in a day.
There are many moving parts when it comes to estate planning. If you try to tackle it all at once, you may become stressed and discouraged. Take it a step at a time and make sure to take advantage of the resources available to you.
Don’t feel locked into the will or plan you’ve created—review and revise as needed.
As your life changes, your estate plan should change with it. Commit to reviewing your documents every so often to make sure they still reflect your wishes.
You should also review your will and estate plan if:
If you have Ayco as a company benefit
Register or log in to learn more about this and other financial wellness topics. If you’re not sure whether your company offers Ayco Financial Counseling, contact your human resources representative.
1Combined lifetime gift and estate exemption.
For disclosures relating to this article, please click here.
By Brandon Ross
Insights from Ayco InnerCircle 2021