• Posted March 25, 2022

Financial Planning And Why You Need an Estate Plan

You do not take any of your possessions with you when you pass. Therefore, an estate plan is so important as part of a financial plan. You need an estate plan to decide where your money goes, to avoid probate, and so you choose who makes decisions on your behalf.

Decide Where Your Money Goes

Your estate plan is essential in deciding where your money goes. You probably have a checking, savings, life insurance policy, and retirement accounts and it is important to decide where this money will go. You can designate a beneficiary for these accounts to make sure your family is taken care of. You can fill out a form to help make it easy. The bank will have a transfer on death designation form that you can fill out to designate who will receive your bank account balances. You should also make sure beneficiaries are up to date on life insurance policies.

Avoid Probate

Avoiding probate can save your beneficiary trouble and is a cornerstone of a sound financial plan. The proceedings of a probate court can last for years. These proceedings cost money that will be taken out of your estate by the court. If a probate attorney gets involved, there may be extra expenses. During probate, your beneficiaries will not receive their inheritance. At the end of the process, they may end up receiving less than you had intended because of the costs of the court. Your privacy will also be violated with probate because it is public. So, if you are a more private person, make sure that your estate plan includes everything, so you will not need to resort to probate.

You Choose Who Makes Decisions on Your Behalf

Two important legal documents for your estate plan are a power of attorney and health care proxy form. These documents will ensure that your plan is executed the way you want it. The power of attorney appoints someone you trust to manage any financial and legal affairs if you are unable to. The health care proxy form allows someone to make decisions for your health care if you become incapacitated. Both will ensure that decisions are made in your best interest.

It is important for you to decide where your assets go when you have others you take care of. Therefore, an estate plan is important. You need an estate plan to decide where your money goes, to avoid probate, and so you choose who makes decisions on your behalf. Talk to one of our certified financial planners to see what your options are.

Check out this article on situations that call for a financial advisor!

Contact Tenpath Financial Group for certified financial planning services.