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Must-do’s for Individuals Considering an Estate Plan, Part Two

On Behalf of | Nov 6, 2010 | Estate Planning |

Yesterday, we began to discuss a number of essential steps for anyone considering the creation of an estate plan. Today we’re going to continue that train of thought, drawing from an excellent article by Steven Merkel, published on SFGate.com.

You can find yesterday’s post here: Must-do’s for Individuals Considering an Estate Plan, Part One

We’ll continue the checklist after the jump.

Step Six: Review the Beneficiary Information for IRA, 401(k) and other Retirement Accounts

For both IRAs and 401(k)s, the account beneficiary is listed in your account information. While you likely put that information in at one point with the intention of leaving it, it doesn’t hurt to take another pass through and ensure that the beneficiary information still reflects your wishes.

Step Seven: Repeat Step Six for Your Life Insurance and Annuities

As Merkel points out, both life insurance and annuities “pass by contract,” just the same as your IRA, 401(k), etc. Take a moment to ensure that the beneficiaries listed are still the individuals you want to receive these assets.

Step Eight: Avoid Probate by Assigning TOD Designations

TOD stands for “transfer on death,” and can apply to things such as bank accounts, CD accounts and individual brokerage accounts. As Merkel writes, “(the aforementioned) accounts are unnecessarily probated every day.” You can set up transfer-on-death directives for assets such as these and, in doing so, save your family and loved ones time and money.

Step Nine: Find an Estate Administrator that You Trust

We’ve mentioned the estate administrator already, but not yet in regards to selection. Basically, your estate administrator will be in charge of distributing your assets in accordance with your directives. Pick someone you trust and feel will be responsible.

Step Ten: Consider the Creation of a Will

Few people will have a will as early as Merkel recommends (18 years old), but his point is a good one. Everyone should have a will, especially once you begin to think about estate planning. On the most basic level, your will acts as a blueprint for the distribution of assets and property. Think of it as extra insurance that your wishes will be adhered to.

Source Article

  • Estate Planning: 16 Things To Do Before You Die (San Francisco Chronicle)