Ensuring Peace for Your Beneficiaries Through Estate Planning

In this blog series, we have been discussing various topics to consider when evaluating or drafting your retirement plan. While planning for retirement is important, we also believe you should plan for what happens after your retirement.

By this, we mean that you should plan how your estate will be handled when you pass away. It is our experience that this dark topic is not something most clients are comfortable discussing since it can be very upsetting to think about.

That said, it’s a conversation worth having. In fact, we’ve shared some helpful strategies to get started in a previous post: How to Make the Most of Estate Planning and another on Beneficiaries and Estate Planning.

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Importance of Ensuring Peace for Your Beneficiaries

Settling an estate can be stressful for beneficiaries if wishes are not clearly detailed, and we have seen this cause tensions between relatives. Typically, it comes down to siblings or other close family to divide up the assets of the owner who has passed away.

If there is no legal document in place to navigate this process, it is very possible that the beneficiaries may argue about the best way to accomplish things. Even worse, the estate would likely go through probate, which could be a lengthy and expensive process.

This process would include a probate judge making the final decision as to what happens to your assets, and this may not follow your desired wishes.

A _Will_ is beneficial since it at least provides the judge with a set of instructions, but a _Trust_ could be even better since it would avoid probate altogether.

If you’d like to dive deeper into the differences, check out our article: Wills vs. Trusts

Consequences of Skipping Estate Planning

Many individuals have a desired plan that they want to happen when they pass away. First, as it relates to a funeral, some want to be buried in a specific cemetery, or they would prefer to be cremated with their ashes spread in a specific location.

However, we have some clients who do not care what happens to their body or how their funeral is handled. These clients tend to prefer the cheapest and easiest option for the heirs so as not to burden them with more responsibilities.

Further, the distribution of any remaining assets is a big decision to consider. Who is going to receive the home or investment accounts? Who will receive the family jewelry?

These should be thought about in advance and ideally covered in an estate planning document, if possible, to relieve the stress and streamline the inheritance process.

Deciding on Funeral Preferences and Asset Distribution

We recommend meeting with an estate planning attorney to determine the best documents for your specific situation. You may be able to handle your wishes with a will, but they may also recommend a trust.

Some clients have believed that a handwritten note would be enough to detail their preferences. However, this letter is not a legal document and would not hold up in court as a legal set of instructions.

This is why we strongly recommend having some sort of legal document in place if you want your wishes to be followed and your inheritance process to be convenient for the beneficiaries.

Keeping It Organized for Beneficiaries

Lastly, one of our recommended ways to help beneficiaries is to consider using our Family Estate Organizer. This is a binder that we provide to our clients to help them keep their finances organized.

All financial records, including accounts statements, tax returns, household inventories, etc., can all be included. This binder allows the beneficiary to see everything in one place to ensure nothing is overlooked.

Some clients have other organizational methods in place already, but we believe this binder includes the handouts and sections that make it comprehensive and more detailed than what clients usually have beforehand.

Key Takeaways for Ensuring Peace for Your Beneficiaries

Planning for retirement is important, but we also believe you should plan for what happens after your retirement.
Settling an estate can be stressful for beneficiaries if wishes are not clearly detailed and we have seen this cause tensions between relatives including funeral preferences and asset distribution.
We recommend meeting with an estate planning attorney to determine the best way to express your final wishes, including using our Family Estate Organizer.

Speak With a Trusted Advisor

If you have any questions about your investment portfolio, retirement planning, tax strategies, our 401(k) recommendation service, or other general questions, please give our office a call at (586) 226-2100. Please feel free to forward this commentary to a friend, family member, or co-worker. If you have had any changes to your income, job, family, health insurance, risk tolerance, or your overall financial situation, please give us a call so we can discuss it.

We hope you learned something today. If you have any feedback or suggestions, we would love to hear them.

Best Regards,

Zachary A. Bachner, CFP®

with contributions from Robert Wink, Kenneth Wink, James Wink, and James Baldwin

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