It is not something you can set and forget, so keep that in mind when drawing up a will.
Unless there are reasons to do it more frequently, experts recommend you revisit your will and other estate-planning documents at least every few years. That could include things like marriage, divorce, birth or adoption of a child, coming into a lot of money, or even moving to another state where estate laws differ from the one where your will was drawn up.
Nick Foulks, who oversees client engagement at Great Waters Financial in Minneapolis, said that one of the main considerations for a review is a life event.
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Estate planning includes a will and other legal documents that address end-of-life considerations. According to a survey from Trustand, only 32% of people in the 25- to-40 age group have a will.
According to a Gallup poll in June, less than half of Americans have a will.
If you have a will or full-blown estate plan, here are some things to review.
It is worth checking if the person you named as the person to take care of your affairs is still a good choice. The person is charged with carrying out your wishes.
It is a big job.
Liquidating accounts, paying any debts not discharged, and even selling your home could be some of the duties the executor could perform.
The guardian you have named to care for your children is still the person you would want.
Take a look at the people you assigned powers of attorney to. The people with authority over you will handle your medical and financial affairs if you can't.
The person who is given this responsibility for decisions related to your health care is different from the person who would handle your financial affairs.
Experts say to make sure whoever holds the financial reins is trustworthy.
Even if you have no major life event, you may no longer be able to handle certain duties.
Retirement accounts such as 401(k) plans and individual retirement accounts are some of the assets that pass outside of the will.
The person named as a beneficiary on those accounts will get the money even if you don't want it.
Foulks said that you definitely see that happen. The family has to go through a court process to get the accounts back after they were left to an ex- spouse.
Unless you agree otherwise, your current spouse is required to be the beneficiary of your 401(k) plans.
Your bank can supply a payable-on-death form for regular bank accounts.
If there is no beneficiary listed on the non- will items or the named person has already passed away, the assets go into the court. All of your debt is paid off and the remaining assets are distributed to your heirs. Depending on state laws and the complexity of your estate, this can last several months to a year.
If you own a home, be sure to find out how it should be titled to make sure it ends up with the person you want. applicable laws can vary from state to state. There are other considerations when it comes to how a house is titled, including protection from potential creditor or tax reasons when the home is sold.
If you want your kids to receive money but don't want to give a young adult unfettered access to a windfall, you can consider creating a trust to be the beneficiary of a particular asset.
A trust is a legal entity dictated by the documents that created it. If you go that route, the assets are put into a trust. They can only get money if you have stipulated in the trust documents.
The average cost to set up a trust using an attorney is between $1,000 and 1,500 for an individual and between $1,200 and 1,500 for a couple. It could cost hundreds of dollars to do it yourself with online software.
