Estate planning: Considering the basics

Estate planning is a crucial element to leaving a lasting legacy with family and friends. A well thought out plan recognizes the best way to pass along assets, while setting clear expectations with potential heirs to ensure your wishes are respected.

Make a will

A will is the instruction to your family and personal representative of your intentions. If you die without one, the government can decide how to distribute your assets, and heirs will likely have to wait longer to receive them. To ensure your assets are transferred where you want them to go, you must have them all properly titled, and keep your paperwork up-to-date. The mechanics of this vary depending on the type of asset — for instance, retirement accounts are generally governed by a beneficiary designation that would control the disposition of assets.

Review your will (and beneficiary designations) regularly

This is a good practice to keep, particularly if a significant change happens in your life such as marriage, divorce, birth of a grandchild, or death of your spouse or a child. If you die with old paperwork in place—leaving money to your spouse who has predeceased you, for instance—straightening it out can cost your family a lot of time and money. If you haven’t updated it in the last five years, now is probably a good time.

Consider a trust

While a will allows for the transfer of assets following death, a trust enables you to pass these assets to desired heirs when you’re still alive. Alternatively, you may want to give some of your assets to charity, which would generate a potential tax deduction.

Share your intentions

Once you’ve completed an estate plan, it may be a good idea to call your heirs together for a family meeting and share it with them. When everyone knows what to expect, it can eliminate the squabbling after the fact, which is when it gets messy and expensive.

Ask an expert

Estate planning is an essential task, but it’s also often complicated, time consuming and charged with emotion for those who do it alone. By working with a professional, you may lessen some of the burden.