At Star Bank, we believe that having a well-crafted estate plan is one of the keys to financial success. We also believe that it’s not just for a select few. Estate planning is essential for everyone, no matter their occupation or financial situation. October is home to National Estate Planning Awareness Week so it’s the perfect time to start thinking about your own estate plans. Let’s get into it!
What is estate planning?
Estate planning is about organizing the distribution of your assets after you pass away or become incapacitated. It is the legal and financial process that ensures you maintain control over your wealth, that your loved ones are cared for, and that your wishes are respected when you can no longer make decisions for yourself.
Here are the key things to think about and plan for when it comes to estate planning:
- Wills and Trusts: Wills specify how your assets should be distributed and designate guardians for minor children. Trusts provide structured management of your assets to minimize taxes and ensure they are used for specific purposes.
- Guardianship for Minor Children: Establishing guardianship ensures your children’s well-being and outlines who will provide for their care and education.
- A Plan for Incapacitation: Estate planning includes appointing a “power of attorney” (POA) to act on your behalf when you are unable to do so. Different types of POAs exist, and they can be invaluable for managing your affairs during illness, travel, or age-related incapacity.
- The Plan to Manage Healthcare: Healthcare directives, like living wills, allow you to outline your medical treatment preferences in case you can’t communicate them. These documents appoint a healthcare proxy to make medical decisions on your behalf.
Regularly Review your Estate Plan
Regularly reviewing your estate plan is crucial because life is dynamic and circumstances change over time. Events like marriage, divorce, the birth of children or grandchildren, changes in financial status, and even changes in tax laws can impact the effectiveness of your plan.
Failing to update it may lead to unintended consequences, such as your assets going to the wrong beneficiaries (or not going to intended beneficiaries), or your instructions for healthcare decisions becoming outdated.
A periodic review ensures your estate plan remains aligned with your current goals and intentions, and allows you to make necessary adjustments to ensure your assets are protected and distributed as you desire.
Get Started Today!
While Star Bank does not provide estate planning services, we can offer guidance on the many financial aspects of estate planning, such as opening accounts or setting up trust accounts. For personalized advice and legal documentation, it's crucial to consult with legal professionals who specialize in estate planning.
When done properly, estate planning allows you to define clear, legally binding decisions through tools like wills and trusts to ensure your assets go where you intend. Careful asset distribution can minimize estate taxes, avoid probate, and prevent disputes among heirs. It also allows you to provide for loved ones, designate charitable contributions, and safeguard assets for future generations, while also leaving a lasting financial legacy.