Questions to Ask Yourself About Your Estate Plan

The Wall Street Journal is running an ongoing series of expert op/eds on the subject of estate planning, and it makes for intriguing reading. One of last month’s entries came from investment guru Mike Piper, entitled “Estate Planning Is About More Than Estate Taxes.”

Piper nails the Number One reason that most people don’t put together an adequate estate plan: they figure that since their estate is smaller than the exclusion amount ($5.43 million for 2015), estate planning isn’t really relevant for them. It’s the old “estates are only for the rich” myth.

“What this line of thinking overlooks,” he writes, “is that there’s a lot more to estate planning than just estate taxes.”

Indeed! In truth, taxes occupy only one corner in the giant arena that is estate planning. A comprehensive plan should also address everything from beneficiary designations and minors’ guardianship to powers of attorney, retirement planning, and whether you’ll be kept on life support in the event of severe injury or coma.

Most interestingly, Piper raises a number of questions that help to illustrate the important of an estate plan even for those whose assets don’t add up to millions. Synthesized, some of those questions include:

• When did you last update the beneficiaries for your insurance policies and retirement accounts? (For example, is an ex-wife still on the list? Is a newborn child missing?)

• Would a trust make sense for you and/or your family? If so, which kind of trust?

• Does your executor know where to find your end-of-life documents, keys, passwords, and important papers? You’d be surprised how often survivors can’t find these after a loved one’s death.

• Do you understand your retirement spending priorities? For example, should you spend first from taxable accounts, tax-deferred accounts, or a Roth?

These are but a few of the many questions that might come up as you engage yourself in an internal dialogue regarding your estate. We find that in almost all cases, it makes sense to have at least the basic estate planning documents duly executed as soon as possible. If you haven’t done that yet and need help — or if you’re due for an update — give us a call. We’re here for you.