The days are long, but the years are short. This has been especially true for my wife & I. After having our first child, the recognition of these “short years” prompted us to prioritize establishing our estate plan. Thank you, Daughter #1 for shifting us into gear.
I’ll admit though, it’s not easy to find time or space to talk about what you’d want for your kids if the situation arises where you wouldn’t be able to take care of them. Nevertheless, the importance for having a Will remains.
To help make a difficult topic a bit more tolerable, this article will walk you through key questions you must answer when setting up a Will. Whether you’re using an online tool like Trust & Will or a local attorney who specializes in estate planning, these are the questions you need to ask yourself.
Who do I want to take care of my Kids?
Who do you want to be in charge of raising your child(ren)? Should it be grandparents? Your brother and sister-in-law? Perhaps a close family friend? When making this decision, it’s a good idea to be forward looking and consider if they could be a long-term guardian for your child.
Just as important, you also want to consider who you don’t want to raise your children. If you have sole custody of your children and you don’t want a former spouse to have guardianship, this is just as important to record in your Will.
If you don’t choose a guardian in your will, you leave the decision up to a judge. The judge in family court will appoint who they believe is the best fit. It’s not guaranteed that the judge will appoint a close family member.
It’s normal to desire selecting the perfect person, but that shouldn’t stop you from setting up a will. If you don’t feel like you have that “perfect person” in your life, you can select 3 or 4 different back up guardians if you wanted to. This can ensure your child is in good care no matter what happens.
Who do I want to settle my estate?
This person would be considered the executor of your estate. When listing an executor of your estate, you should consider who is trustworthy and responsible enough to handle your financial affairs. The executor is in charge of paying final medical expenses, final debts, bills, and ensuring assets are distributed to the correct beneficiaries.
Here are some questions to ask when considering who will be your executor:
- Are they organized?
- Will they likely have the time to handle my financial affairs?
- Does this person have any kind of financial troubles of their own?
You may also consider telling this person that you have listed them as an executor. By providing this awareness, you can prevent delays or confusion from happening with your financial affairs.
Who will take care of my pets?
If you have pets, you may consider listing in your will who you want to take care of them. By stating your wishes in your Will, you will prevent any guesses or arguments about where you want your pets to end up.
Who do I want to inherit my money and things?
You will list beneficiaries in your will and those beneficiaries will inherit your assets upon your passing. Assets such as your bank accounts, home, and personal belongings. If you have personal belongings like art, heirlooms, a bourbon collection, etc. which are meant to go to different beneficiaries, you may consider making a list that identifies who will inherit what.
Investment accounts such as your IRAs, 401(k)s and taxable accounts (with a transfer on death designation) allow you to directly designate your beneficiaries. You can include primary and contingent beneficiaries. Contingent beneficiaries can ensure your assets are inherited in the case primary beneficiaries do not survive you. Life insurance policies are another financial instrument where you designate beneficiaries. This direct beneficiary designation allows your assets to be directly transferred upon your passing.
A young family may not need or want to create a full estate plan. But leaving these decisions up to a judge is probably not going to play out as you wish. For this reason, it’s imperative to answer these questions when preparing your Will. Answering these for yourself will ensure your desires are addressed in your Will. Then, once you’ve written and made your Will official, you can have the peace of mind that your kids and your finances will be taken care of when you’ve passed away.
Panoramic Financial helps new attending physicians make sure they have an estate plan in place. Please click “Work With Us” at the top of the page to learn more.
The foregoing content reflects the opinions of Panoramic Financial and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Panoramic Financial does not give tax or legal advice. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.