When was the last time you updated or reviewed your estate plan? Perhaps more importantly—do you have an estate plan that includes all the necessary documents and covers all your bases? If not, you’re not alone. In 2021, only 44% of adults aged 55 and older have an estate plan.1
The consequences of not having an estate plan can be severe for your surviving loved ones. Here’s what you need to know about creating a comprehensive estate plan.
Who Needs an Estate Plan?
If you have money or other assets to leave behind, you need an estate plan. A solid estate plan ensures your wealth is distributed to the people or charities you want to receive it and it makes it much easier for your executor to manage the affairs of your estate.
If you are a New York resident and pass away without a will or estate plan, many of your assets will be divided up according to the state laws of intestacy (a fancy word that means dying without a will).2 Most people don’t like to think about the state government handling their assets, which is why estate planning should be a critical part of your financial plan.
What Might an Estate Plan Include?
The most basic document in an estate plan is the will. A will can be used to designate many aspects of your affairs, including but not limited to:
- Division of your assets
- Wishes for your personal items
- Guardianship for your minor children
- Instructions for how to pay your debts
When you create a will, you must name who you wish to be the executor—the person who will oversee the administration of your wishes that have been stated in the will. You can create a will on your own or in partnership with a trusted expert, such as an estate attorney.
If you have an especially large estate or family members who are prone to disputes, you may need to set up a trust in addition to a will. Certain types of trusts provide more support and protection for people with large estates that may be subject to taxes or predatory creditors. Trusts are more complex and costlier to set up than wills, so you should expect to work with a professional if you decide to go this route.
Your estate plan may also include an advanced directive, which specifies your wishes regarding end-of-life care. An advanced directive may also define your desires in case of physical or mental incapacity. This document helps ensure your family members are making a decision you would support and removes the agonizing need for them to make important healthcare decisions without your input.
How Do You Create an Estate Plan?
While you may be able to draft a will on your own using resources available online, most people with a high net worth will need more customized and comprehensive estate planning. In addition to hiring an estate attorney, you should partner with a financial planner who can help you make sure all aspects of your financial situation are covered by the estate plan and working cohesively to achieve your goals. To get started, call our Infiniti Wealth Management office at 845-278-8638 or send us a message to set up a complimentary consultation.
Michael Durante is a founder, Certified Financial Planner™ (CFP®), and Certified Divorce Financial Analyst™ (CDFA®) at Infiniti Wealth Management, an independent, fee-only financial advisory firm. With over 25 years of experience, Mike specializes in serving women who are going through a life transition, whether that’s a divorce or the death of a spouse, as well as pre-retiree and retiree couples. He is passionate about helping his clients develop a personalized financial plan based on their values and goals so they enter retirement with confidence and peace of mind. Mike has both a bachelor’s degree in business administration and an MBA from Pace University. When he’s not working, Mike loves spending time outdoors hiking, biking, walking, golfing, campfires, the beach and doing yard work, as well as spending time with family and friends. Mike also enjoys to read, travel, and check out local restaurants and events. To learn more about Mike, connect with him on LinkedIn.
September 22, 2021 - Michael Durante, CFP®, CDFA®