Although most of us have some idea of where we want our money to go after our deaths, recent surveys report that more than half of Americans do not have a will in place. For individuals without heirs, dying without a will (“intestate”) leaves the dividing of all assets to the state’s court system, and the outcome may not be what the individual intended. Indeed, the property may be given to estranged relatives or even kept by the state (“escheated”).
That’s why estate planning is essential for everyone, and whether you’re a single person or a childless couple, you’ll start with a few key steps:
- Name an executor, the person who will carry out the provisions of your will. This could be a trusted friend, relative, colleague; even a representative from your bank may be able to serve as your executor (although this option may incur a fee).
- Choose someone to have power of attorney if you should become incapacitated and unable to manage your own affairs. Different people can be designated to handle medical and financial matters, or the same person could be charged with managing both.
- A living will or advanced health care directive may be especially helpful for individuals without heirs, as it will ensure that your wishes for your medical care (including difficult end-of-life decisions) are relayed to your care team.
- Take stock of your assets, including real estate, vehicles, heirlooms, bank accounts, stocks and bonds, life insurance policies, retirement plans, and any ownership in businesses.
- Choose your beneficiaries for each of your assets; these can be friends, nieces and nephews, and other individuals, or they can be charities or scholarship funds. Remember that financial accounts such as 401(k) plans and life insurance policies do not pass through the will, so be sure to update each account with your preferred beneficiary(ies). Leaving a retirement account to charity can help the charity avoid paying taxes on the gift.
- When you create your will, establish which beneficiaries will receive each asset. If you have animal companions, be sure to include arrangements for their care.
- For leaving money to charity, options include a charitable remainder trust, in which you fund the trust with your assets, the trust pays you over time, and whatever is left after your death goes to the charity of your choice. Another option is a charitable foundation, with instructions on how to distribute the money over time to different organizations, such as scholarships, and more.
Other Resources
During the estate planning process, if you find yourself in need of additional funds and if you have life insurance policy, Fifth Season Financial might be the right fit for you. Fifth Season offers advance payment from your policy through the Funds for Living and Giving Program (FLAG), only if you’re suffering from a terminal illness. You’ll maintain ownership of the policy, and there will still be funds for family, friends, for charity, and for other beneficiaries to receive in the future. For more information, .
Are you in the estate planning process, in need of additional funds and have a life insurance policy? Fifth Season Financial might be the right fit for you. Through the Funds for Living and Giving Program (FLAG), you’re able to receive an advance payment from your life insurance policy while still preserving funds for your beneficiaries to receive in the future. If you’re interested in finding out how life insurance loans can help you, contact us for more information at .
Disclaimer: Fifth Season Financial is not a financial advisor or consultant and recommends that you speak to an advisor or expert before making any significant financial decisions. State bar associations and the American Bar Association can help you find the attorney with estate planning expertise who is right for you.
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