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Improving the function of an estate plan

On Behalf of | Mar 15, 2021 | Estate Planning |

Estate plans give families knowledge, reassurance and comfort after their loved ones pass away. For the planners, an estate plan can provide financial security and protection from fraudsters. 

An estate plan that complements a person’s lifestyle and personal requirements takes time and research to create. Optimizing its function requires people to regularly assess and update their plans as they experience meaningful life changes. 

Proactive planning

An estate plan can include a will, trusts, IRA’s and 401Ks among other things. For business owners, they may also include a succession plan for the purpose of guiding their company after their death. People can decide which aspects of planning will make the biggest difference in their situation after assessing what they want for their surviving family. 

The idea of making a cumulative estate plan may sound overwhelming, but what many people forget is that even simple actions can make a significant difference. According to MSN, people can begin by focusing on the beneficiary designations for notable financial accounts in their name. These may include bank, investment and retirement benefits accounts. Following the prompts, people can fill out the information and designate beneficiaries in a legally-binding document. 

Periodic assessment

A periodic review of an estate plan can help people recognize where updates will improve and preserve the function of their plan. Fidelity suggests that people immediately update plans following significant life events including the following: 

  • Births 
  • Deaths 
  • Divorce 
  • Remarriage 

When people overlook updating their plan, the distribution of their assets will follow the instructions in the original plan. This can cause familial discord resulting in costly legal fees and emotional distress for surviving family members who disagree over what the deceased would have wanted. In conjunction with updating their plan, people may consider discussing their end-of-life wishes with their family to provide context and encourage unity among the people they love.