If you’ve ever had to navigate the final affairs of a loved one, you probably have a great understanding of the value of estate planning . Regardless of age, income, or asset level, estate planning can greatly benefit those you leave behind, especially the ones tasked with wrapping up your estate.
Estate planning is an important part of your financial plan because it can help preserve your wealth and legacy, protect your loved ones and make sure your final wishes are carried out. It can also help reduce income, gift, and estate taxes.
I recently heard from a friend who lost both of her parents within a short span of time. While losing the first parent came with its own challenges, the situation seemed much simpler when there was a surviving spouse. After the second parent passed, it was now the responsibility of my friend to take care of everything, leaving her with a much greater emotional and legal burden. The type of trust her parents had established needed to be updated, a bank account needed to be set up and settlements needed to be directed to the right account, among other details that the process required.
While the length of time can vary greatly depending on each situation, data has shown that settling an estate can take an average of 16 months to complete, with an average of 570 hours of work put in by the executor.
Some of the typical estate steps you’ll need to follow upon the death of a loved one include:
- Obtain a death certificate – Get several certified copies as you will need to distribute these to various agencies and companies.
- Arrange for burial and funeral – Locate and review any estate documentation for instructions pertaining to these events.
- Locate important documents such as a will and financial account information – If you’re not already working with professionals, this could be a good time to seek the advice of an accountant or tax advisor and a financial planner.
- Probate or administration of the estate
- Manage accounts and assets and pay debts and taxes
- Distribute assets and close the estate
Overall, the details handled through the estate planning documents were more straightforward for my friend. However, the parent’s trust hadn’t been updated in 15 years. Many assets (accounts, vehicles, land and more) had been accumulated over that time. When this happens, the assets could be subjected to probate, whose complexity can vary greatly. Probate is time consuming and can be costly.
When we help individuals and families with their financial planning, we work to make sure their estate planning is in order and kept up to date. It’s an important piece of the overall financial plan. If they don’t currently have estate plans, we can work with them to find legal counsel based on their needs, whether that be creating a will, establishing a trust, or a combination of strategies.
For family members and loved ones, end of life affairs can be emotionally taxing, as they often involve dealing with the loss of a loved one while navigating legal complexities and potential disputes. When your family knows they are carrying out your final wishes, it can help ease the burden, emotionally, financially and legally.