Wealth management professionals advise their high-net worth (HNW) clients to take some important steps when developing their estate plans to help ensure a seamless transition of their wealth to their heirs and beneficiaries. However, these steps are wise for just about anyone, even if your estate isn’t in the millions of dollars.
Let’s look at five of these steps:
Determine who will manage your estate
Think carefully before asking people to take on the role of executor or trustee. Make sure they can handle the responsibility and deal with the family. Sometimes, people choose professional trustees, such as institutions. This can help minimize family squabbles and resentments.
Choose the right instruments for your assets
You may set up a living trust, for example, and/or individual trusts for your kids in addition to a will. Your financial and tax advisers and your estate planning attorney can help you make the best choices depending on your goals and your individual family dynamics.
Don’t forget about overseas assets
If you have property, businesses or other assets in other countries, your U.S. estate plan may not cover them. It’s essential to make sure you’re following the laws of the country in which they’re located, or your executor and your family could run into serious complications when settling your estate.
Don’t let your estate plan surprise your heirs
You can minimize conflicts and legal battles after you’re gone by being honest with your family about what you are (or aren’t) leaving them. This is particularly true if you’re making decisions that some people may not like. You don’t have to give them precise dollar figures. However, it’s best if they understand your thinking and that the decisions weren’t unduly influenced by anyone.
Make sure your executor can find all the necessary documentation and information
Let them know where they can access copies of all of your estate documents as well as other crucial information like your burial wishes, your passwords and any accounts they’ll need to manage or close. Don’t leave everything in a safe deposit box that they won’t be able to access without a death certificate.
Your estate planning attorney can be a valuable resource for your executor and other fiduciaries. Therefore, make sure they know who your attorney is and how to contact them.