A life of hard work and sacrifice offers the opportunity to leave a legacy that lifts up not only your family, but your community. There are important considerations as you approach financial planning to transfer wealth to future generations.
Creating an estate plan is a foundational step. While it can seem intimidating, a team of trusted professionals, including a financial advisor, estate planning attorney, and accountant, can ask the right questions and help you avoid potential pitfalls.
“Developing an estate plan is about taking control. You are directing how the assets you have accumulated over your lifetime are passed on to the people and organizations that you care about,” says John Ripoll, Senior Vice President for Wells Fargo Advisors.
Your situation’s complexity will determine which documents your plan requires; however, these five are often included in an estate plan:
A will provides instructions for distributing your assets to your beneficiaries when you die. In it, you name a personal representative (executor) to pay final expenses and taxes and distribute your remaining assets.
A durable power of attorney lets you give a trusted individual management power over your assets if you can’t manage them yourself. This document is effective only while you’re alive.
A health care power of attorney lets you choose someone to make medical decisions for you if you are unable to communicate your wishes, or don’t have legal capacity to make treatment decisions for yourself.
A living will expresses your intentions regarding the use of life-sustaining measures if you are terminally ill. It doesn’t give anyone the authority to speak for you.
By transferring assets to a revocable living trust, you can provide for continued management of your assets during your lifetime and after your death — possibly for generations to come.
Establishing a plan is only the beginning. Significant life events are likely to call for changes to your plan.
Ripoll explains, “It’s important to regularly review your plan to ensure it continues to meet your needs. You want to consider whether your estate planning documents, asset titling, and beneficiary designations have been coordinated to allow your assets to be distributed according to your wishes. A regular review of who you have named as agent, executor, guardian for minor children, and trustee is important to ensure those named are still willing and able to serve when needed.”
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