When Should I Start Worrying About an Estate Plan?

Shot of a young couple using a laptop together at home to create a will.

Who wants to spend an afternoon thinking about their mortality? No one, which is why more than half of Americans don’t even have a will.
A will is a legal document that directs:

  • What happens to your possessions
  • Who will handle your possessions (your executor or personal representative)
  • What you want to have happen to your children by naming a guardian to take care of them

Without a will, you are leaving the disposition of your assets and the guardianship of your minor children to a court. In Nebraska, for example, if someone were married at the time of death and died without a will, the spouse does not receive all of the assets if the person who died has children.
Even from this one example, you can see that creating and structuring a will is complex. Let’s look at a few of the basics to help you start this important conversation.

How Can I Create a Will?

Check to see if your employer offers any kind of legal benefits as some employers offer their stakeholders help in getting an estate plan created. There are also online DIY services. However, the big pitfall of DIY estate planning is while a lawyer checks that the documents comply with legal standards, no one is verifying proper execution.

For most people creating a will, hiring an estate planning attorney makes the most sense. The attorney verifies accuracy and can work with your financial advisor to confirm your will coordinates with your financial accounts, your savings plan and your legacy wishes. Plus, the attorney can point out things that you may have never thought of – there are a lot of angles here, and a lot you can do to make sure your loved ones are well cared for.

It’s important to find an attorney who specializes in estate planning. State laws are constantly changing so you want to work with someone who is in that area of law on a daily basis so you can ensure you have a plan that complies. Ask friends and coworkers if they know a good estate planning attorney. You can also look up your local estate planning council or bar association to see if they can give you some names to help with creating a will.

Next, you’ll want to connect with several estate planning attorneys and determine the best fit. Ask about the process and what fees you will likely face. You should also find out what you need to do to prepare for your next meeting. Another tip is to look for someone who is younger than you so they can continue to help you with your planning needs throughout your lifetime.

Do I Need a Trust?

Creating a will is absolutely necessary regardless of whether you add a trust to your list of estate planning documents. But a common question is “do I need a trust?” My answer: It depends.
A trust can be an important step toward fulfilling your family’s financial goals. There are specific advantages to having a trust, including continuity of asset management, privacy and tax savings.
A living or revocable trust provides for the organization and management of your assets during your lifetime, including any periods of disability. In addition, having your assets in a trust during your lifetime will prevent your estate from having to pass through a court-supervised process called probate if you only have a will (or no will) at the time of your death.
Creating a trust also provides an incredible amount of flexibility after your death. For example, you could have your trust divide up your assets after you are no longer living and create new trusts for your children to protect them against creditors and divorce.

The Drawbacks to Trusts

Trusts do have a downside. Compared with wills, creating trusts comes with additional work of funding the trust and making sure all assets are in the trust. Your attorney can discuss the options for creating and funding a trust with you. Regardless, you’ll still need a simple will as a back-up, even if you do some trust planning.

Prioritize Your Estate Plan

Whether you decide to create a trust, prioritize getting your will and powers of attorney completed. Creating a will and other estate planning documents isn’t necessarily a Herculean task. The bonus of getting it done is that you may sleep better at night knowing you have a plan to take care of loved ones when you are no longer able to.
Your financial advisor can help you begin this conversation in a way that makes sense for you and your family. Knowing not just your holdings, but your lifestyle and values will help you shape a legacy that expresses your care for the people and causes you love.

The views stated are not necessarily the opinion of Cetera Advisor Networks LLC, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.
The use of trusts involves a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional before implementing such strategies.
For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.

Get in Touch

In just minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Contact Us
Business professional using his tablet to check his financial numbers

401(k) Calculator

Determine how your retirement account compares to what you may need in retirement.

Get Started