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Ensure Your Life Wishes Are Granted Through Effective Estate Planning

Legacy planning is often the last piece folks tackle in their financial planning, because it’s the least appealing to think about.

Planning for a robust nest egg that will keep you safe, secure, and fulfilled when you stop working? Fun!

Deciding what to do with your assets when you’re no longer around to enjoy them? Not so much.

But if you put off your legacy planning too long, you run a real risk of leaving behind nothing but headaches for your loved ones.

Here’s a quick checklist that will help you and your spouse outline a legacy plan that will protect your assets, care for each other in the event of incapacitation, and give you both some peace of mind.

Create a balance sheet

Maybe the best way to ease into this process is to set aside emotion for a moment and get the raw numbers on paper.

Start by adding up all your assets, including:

• Real estate
• Personal valuables (vehicles, jewelry, etc.)
• Bank accounts
• Investment accounts
• Retirement plans (401(k), IRA, pension, etc.)
• Business interests (ownership, equipment, etc.)
• Benefits payable upon death (life insurance, Social Security, etc.)

From this total, subtract your liabilities, such as:

• Credit card debt
• Mortgage
• Vehicle loans
• Personal loans

This simple balance sheet should give you a rough idea of your net worth. It will also give you a list of items you’ll want to consider passing down to heirs, and a list of debts you might want to work on paying down.

Determine what plans you have and what plans you need

At the bare minimum, everyone should have:

• Last Will and Testament, which details how you want your assets distributed to heirs and/or charitable organizations.
• Power of Attorney, which authorizes someone of your choosing to act on your behalf if you’re incapacitated.
• Health Care Directive (aka Advance Directive), which details what kind of care you want should you become incapacitated.
• Living Will, which authorizes someone to make medical decisions for you if you can’t, based upon what’s stipulated in your health care directive.

Any of these documents that you don’t have, recommend you get working on.  If you like listening to podcast we talk about Advance Directives and Estate Planning in Episodes 28 and 30 on our Podcast “Peeling Back Money and Life”.

If you have any older versions of these documents that you haven’t looked at in a few years, you should review them to make sure they’re up to date.  Also, look at the beneficiaries listed on your retirement accounts and life insurance products if you have any.

Discuss your legacy wishes with your spouse

Now comes the tough part – filling in all the blanks.

Like every other part of your retirement planning, clear and open communication with your spouse is key. If you’re having trouble opening this line of dialogue, here are some questions to get you started:

• Do we have all our important documents (personal ID, bank accounts, legacy documents, etc.) organized in one place?
• Who should execute our will?
• Who are our key beneficiaries? What do we want to leave them both financially and non-financially?
• What charities or causes would we like to support with our legacy?
• What are our medical wishes in the event one or both of us become incapacitated?
• If one of us passes, where will the surviving spouse live?

See more in our blog on “Crafting a Meaningful Legacy as Part of Your Estate Planning”.

Meet with professionals

Again, we understand that these are difficult questions to tackle. Many folks prefer to tell themselves, “I won’t be around, I don’t care, the good kid will take care of it. OR it will be fine you guys will figure it out, there won’t be any disagreements or arguments.”

Unfortunately, your state of residence doesn’t consider this a legal estate plan. If you don’t have all your essential documents in order when you pass, the state will settle your estate according to local law. In even the closest families, this process can get really messy once the courts start deciding where your assets will end up.

We believe that part of living the best life possible with the money you have is putting a plan in place that will extend your legacy for years to come, while also making a difficult time a little bit easier on your loved ones. The best way to achieve this goal is to work through these hard questions and then bring a “rough draft” of your legacy plan to us. We can help finalize any lingering details, facilitate any challenging discussions, and connect you with legal professionals who will make sure your legacy is executed the right way when the time comes.

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Frequently Asked Questions

What documents do I actually need for an estate plan?

At the bare minimum, everyone should have a last will and testament, a power of attorney, a health care directive, and a living will. Those four cover where your assets go and who speaks for you if you cannot speak for yourself. If you have older versions sitting in a drawer that you have not looked at in years, pull them out and make sure they are still up to date.

What happens if I die without a will in Iowa?

We are not attorneys, but here is the slightly morbid part: if you do not have your documents in order, the state settles your estate according to local law, not according to what you wanted. Even in the closest families, that court process can get really messy once a judge starts deciding where things end up. A plan keeps that decision in your hands instead of the state's.

Why should I check the beneficiaries on my retirement accounts?

Because the beneficiary listed on your 401(k), IRA, or life insurance usually overrides whatever your will says. If that form still names an ex-spouse or a person who has passed, that is where the money goes, period. It is one of the easiest things to fix and one of the most commonly missed, so it is worth a five-minute look.

How do my spouse and I even start this conversation?

Set the emotion aside for a minute and start with the raw numbers on paper, a simple balance sheet of what you own minus what you owe. From there, work through the practical questions: who executes the will, who the beneficiaries are, what your medical wishes are, and where the surviving spouse would live. Clear, open communication is the whole game here.

Do I need an attorney, or can you handle my estate plan?

We are not attorneys, so we do not draft the legal documents. What we do is help you work through the hard questions, bring a rough draft of your wishes to the table, and connect you with legal professionals who make sure it is executed the right way. Think of us as the folks who help you get your ducks in a row before you sit down with the lawyer.

Is estate planning only for wealthy people?

Not at all. If you own a home, have a retirement account, or have kids, you have an estate worth planning for. We believe part of living the best life possible with the money you have is putting a plan in place that extends your legacy and makes a hard time a little easier on the people you love. Does that make sense? If you want a hand getting started, just give us a holler.