What do Jimi Hendrix, Bob Marley, Pablo Picasso, Steve McNair, Aretha Franklin, and Abraham Lincoln have in common? No, it’s not that they’re all dead (though, yes, they are). It’s not even that they’re all famous (however true, that would be too easy). It’s that they all weren’t very money smart and died without a will, causing their loved ones undue hardship and expense.
Wait a moment, you history buffs say, that’s not quite being fair to Lincoln.
And you’re right, it’s not. Lincoln did, indeed, die intestate (without a will) but his children and wife did not suffer extra on account of this because Supreme Court Justice David Davis stepped in as estate administrator and handled the president’s affairs free of charge. This is not a plan B many of us can rely on, however.
As a lawyer, Lincoln should have known about the importance of drafting a will but then so too should have Picasso, Hendrix, and everyone else on the aforementioned list. After all, executing an estate plan is the single most important thing someone can do to protect loved ones and assets, and those previously listed had plenty of both.
Overlooking the need to write a will is not the exception, but the norm. By most estimates, between 50% and 60% of US adults have done no estate planning of any kind—which is terrifying. The number one money smart tip any retirement planning consultant will give you is to organize your affairs and yet everyone from former presidents to world-famous painters fail to do so.
Be money smart and be the exception. Below is a checklist of everything you need to do to get your estate and finances in order.
Estate Planning in Five Steps
1. Take Stock of Your Assets
Itemize everything you own including your home, financial accounts, retirement accounts property, jewelry, collectibles, vehicles, and digital assets.
2. Make a List of All Debts
Note any credit streams you maintain, including credit cards and lines of credit. List loans such as auto loans and mortgages. Add any other debts you may owe and make copies of account numbers and signed agreements.
3. Review Life Insurance and Retirement Accounts
It’s not just your will (which we’ll talk about later) that includes beneficiary designations. Life insurance policies and retirement accounts do, too, and these designations take precedent over any others. Thus, you need to review the listed beneficiaries on these accounts and ensure they are current with your wishes.
4. Name Your Executor and Powers of Attorney
Your estate executor is the person responsible for administering your estate after you die. Your powers of attorney are individuals empowered to handle your financial or medical affairs should you suffer incapacitation. Trusted loved ones are the people best suited to these roles and so assigning them requires thoughtful conversation.
5. Execute Your Will
Your will provides instructions for your executor concerning the distribution of your assets. It is also a space to designate guardians to minor children and pets. You can leave assets to charity in your will and provide funeral and burial instructions, as well.
6. Bonus Step: Keep Your Plan Up-to-Date
Every retirement planning consultant agrees that most estate planning mistakes happen because documents fall out of date. Avoid this by reviewing your plan with your attorney every few years or any time a major change occurs (a child or grandchild is born, a marriage or divorce occurs, etc.)
To learn more about estate planning or to get started on your plan today, do not hesitate to reach out to the Deliberato Law Center today either by calling us at (216) 341-3413 or using the contact form on our website.
Contact the Estate Planning Attorneys at Deliberato Law Center