Regardless of age and wealth, virtually everyone should consider having an Estate Plan in place. There are five key elements an Estate Plan should have: Wills, Trusts, Power of Attorney, Health Care (or Medical) Directive, and Beneficiary Designations.
Having a beneficiary on bank accounts and other assets is the fastest and easiest way to pass on funds in the event of death. A beneficiary can be one or multiple persons, a trust, or even a business entity such as a church, charity or other non-profit organization. You will need to compile a list of your assets when it comes to designating what you would like to go to your beneficiaries. These can include:
- 401(k), 403(b) and other retirement accounts
- IRAs, including traditional, Roth, SIMPLE and SEP
- Life insurance policies (including those provided by your employer)
- Bank and brokerage accounts
- 529 education plans
- Investment and mutual fund accounts
- Real estate, including your home and any investment properties
- Business interests
- Personal property
Not having a beneficiary on your account can result in your assets passing on to your estate and being disbursed by a personal representative or executor. It is wise to review your beneficiaries and estate planning on a yearly basis to make certain that everything is current and accurate. Your bank or asset manager can help you with making sure your accounts have beneficiaries.
If an estate does go to probate–probate is simply the court-supervised procedure your estate goes through after you pass away–a separate estate account will need to be established to collect assets before the final disbursements.
In the state of Nebraska, if the total estate is worth less than $50,000, probate is not required.
If you anticipate needing someone to act on your behalf while you are still living, it is a good idea to choose a trusted person to be your Power of Attorney (POA). There are different types of POA’s, including medical, financial, durable and general. A legal professional can help you determine the right POA for your needs. It is important to note that your POA’s authority ends with your death. A last will and testament can give you the opportunity to name an agent to handle your estate.
It’s best to consult with an Estate Planning attorney for additional information regarding creating an Estate Plan.
