Estate Planning: The Finances of Loss

When you experience a death in the family, finances should be the least of your worries. That’s why it’s so important to handle these affairs ahead of time, ensuring that loved ones are taken care of in the case of death or incapacitation. From probate to power of attorney, Origin Bank breaks down the estate planning process. 

1. Itemize your physical assets. Create an itemized list of all valuable items, from antiques and precious jewelry to family heirlooms. If you know you want to leave something to a specific person, make a note. Photographing these items can help keep things organized.

2. Itemize your non-physical assets. You’ll also need a list of your financial assets including bank accounts, annuities, real estate, and life insurance policies. List all relevant account numbers or contact information for holding firms, keeping paper copies of recent statements or documents in one folder. Just make sure to store it in a safe place.

3. Create a list of debts. In addition to assets, create a list of outstanding loans or other debts so it’s clear what you owe. This list should include things like open credit cards, mortgages, and auto loans.

4. Double-check your retirement accounts and insurance policies. Regardless of what your will states, the person listed as the beneficiary on your account or policy will receive those assets. That’s why it’s so important to double-check your selections, especially if you have a change in circumstances such as marriage, divorce, or the birth of a child.

5. Set up “transfer on death” designations. Depending on which state you live in, a probate court might have to grant your heirs the right to administer your estate. This process is often expensive and time-consuming. However, you can set up “transfer on death” designations so assets like savings, brokerage, or CD accounts pass directly to your heirs.

6. Designate an estate administrator. Choose a person you trust to administrate your will when you die. Though many people’s first thought is their spouse, that person is often under immense emotional pressure after the loss. Consider a close friend, trustworthy family member, or neutral third party like an estate trustee, attorney, or financial advisor.

7. Write your will. A will is the most important estate planning document. Find an attorney you trust and use your itemized lists of valuables and holdings to distribute your assets. You can also designate guardianships for minor children or pets, and grant assets to favorite charities. Afterward, send a copy to your estate administrator.

8. Choose a power of attorney. A power of attorney document allows you to designate someone to make decisions on your behalf. If you become incapacitated, this agent can make medical or financial decisions in your best interest, rather than leaving matters to a court-assigned legal guardian. To eliminate guesswork and ensure your wishes are carried out, document these preferences clearly so your POA can act accordingly. You can include information such as burial wishes and whether or not you want to be an organ donor.

Regardless of your financial circumstances, estate planning is one of the best things you can do for your loved ones. Contact a trusted advisor at Origin Bank to start the conversation.