Estate Planning: Why it matters and what you can do

Some of your most important personal financial goals may include ensuring the well-being of others who depend on you. In a nutshell, that is why estate planning matters – because it helps both preserve your wealth and share it with people and causes you care about.

Yet the National Association of Estate Planners and Councils estimates more than half of Americans (56 percent) do not have an up-to-date estate plan. Here is a quick overview of what you can do.

First, take an inventory of your assets. What do you own? And where are the records? Property (both real and intellectual), securities, insurance policies, bank accounts and other valuables all need to be identified and located.

Next, tackle the necessary documentation. You need, at minimum, three cornerstone documents.

Durable Power of Attorney – Appoints an agent to act on your behalf regarding financial matters, including if you become incapacitated.

Health Care Directive – Appoints an agent to act on your behalf for medical decisions, should you become incapacitated (including HIPAA release).

Will – Outlines your wishes of how and to whom property is to pass at your death.

Related to the documentation, you also need to determine who you want to benefit from your financial success and when you want them to have assets. In addition to thinking about wealth transfer at estate settlement, your financial legacy may include helping loved ones achieve a financial goal today or fulfilling a philanthropic vision during your lifetime. Family dynamics and tax considerations may also play a role in your distribution decisions.

As your life continues to change, you will want to ensure your estate plan keeps pace. It is recommended you review your estate plan every three to five years or when you experience:

• Changes within family (births, marriages, divorces or deaths),
• Changes to your estate (such as significant inheritance or gifting), or
• Changes to estate laws (either at the state or federal level).

Explaining your wishes with the people who may be affected helps them understand what to expect. The level of detail you provide is up to you; the purpose is to help avoid unpleasant surprises. At a minimum, let your executor and/or trustee know your basic wishes and the location of key documents.

Organization. Documentation. Decisions. Evaluation. Discussion. Your RBC Wealth Management financial advisor has the experience and tools to help you develop and implement an effective estate plan. He or she can also simplify matters by coordinating with your accountant, attorney and other professionals. Contact him or her today, or use the locator tool to find an advisor near you.

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