Essentials of Estate Planning: Beyond Signing Papers

By John Curle, CFP® | Apr 29, 2024 |

Many people focus solely on drafting and signing the necessary documents regarding estate planning. However, there’s much more to delivering the essentials of estate planning than just putting pen to paper. Take proactive steps to update assets and guarantee that your wishes are realized and legacy is protected.  

Don’t just sign papers — solidify your estate plan and ensure it’s effective. Here are three steps to the essentials of estate planning:

#1 Update beneficiary designations

Designations found on retirement accounts, life insurance policies, and certain other assets hold significant weight and can supersede the instructions outlined in your will. If your life insurance policy designates one beneficiary while your will specifies another, the policy’s designation will take precedence.  

To avoid discrepancies and ensure alignment with your estate planning goals, periodically review and update beneficiary designations. Work with an attorney to draft specific beneficiary designation language that accurately reflects your intentions and preserves any trust planning.  

Regular reviews will help ensure that these designations remain consistent with your evolving wishes, providing peace of mind that your assets will be distributed according to your desires. Major life events can be a good time to reassess your plans; the death of a loved one, the birth of a child, marriage, or divorce are a few times when updates may be advisable. 

an estate plan

Read: An Estate Plan for Different Stages in Life

#2 Retitle assets

Depending on your residence and other planning considerations, your attorney may recommend establishing a revocable living trust (RLT). If an RLT is established, it is crucial to follow through by retitling specific assets, including investment accounts, real estate, and bank accounts, into the trust’s name. As assets grow in size and complexity over time, having a consolidated view (net worth statement) of assets and liabilities will make the ongoing monitoring and review more straightforward.  

Failing to retitle these assets could potentially negate the benefits of the trust upon your passing, rendering the time, effort, and resources spent on estate planning futile. Therefore, ensuring that these critical next steps are taken to safeguard your intentions and protect your legacy for future generations is essential. 

#3 Other considerations

In addition to updating beneficiary designations and retitling assets, there are other important considerations to address when executing an estate plan. For example, suppose you retitle a residence into the name of a revocable living trust. In that case, you may need to update the insurance policy to include the trust as an “additional insured” entity. This oversight can streamline the claims process in the event of property damage, ensuring a smoother transition for your heirs. 

Evaluate the composition of your assets and any potential tax implications. Legislative changes often complicate asset distribution and taxation rules, underscoring the importance of ongoing reviews and adjustments to your estate plan. For example, the Secure Act and Secure Act 2.0 made shifts around retirement plan distribution rules to beneficiaries that could change how one might approach beneficiary designations. Consultation with your attorney and planning team can help optimize your strategy to minimize tax liabilities and ensure the financial well-being of your beneficiaries.  

Take proactive steps to update beneficiary designations, retitle assets, and address additional considerations to safeguard your estate and provide for your loved ones. Regular reviews with your planning team can help adapt your plan to life changes and evolving legislation, ensuring its continued relevance and effectiveness.  

Don’t leave your legacy to chance — take control of your estate plan today. 

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