Planning For Retirement
Get Started on your Estate Plan: Essential Info & First Steps
Date:18 April, 2018
Do you ever get that running loop in your head about end of life planning? You know you need to get started, but with an overwhelming list of “essentials” and a plethora of “must do” suggestions on the internet, it’s hard to know where to start. A lot of the tasks have legalese-sounding names and are perhaps documents with which you are unfamiliar.
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Below is a list of the first steps and essential items you need to start your estate plan. Once you have these set, you’ll have a solid foundation to work from to ensure your loved ones are provided for when you’re gone.
CREATE A LIST OF CURRENT ACCOUNTS, ASSETS & BILLS
One of the easiest ways to get started with this process is to list everything you already have, including your assets and your outstanding bills or loans. Create a computer spreadsheet that includes information about the following items. Make sure it’s a password-protected document because you’ll want to make sure it covers important information, like logins and account numbers.
- Copyrighted materials you own
- Outstanding mortgages or loans
- Bank and brokerage accounts
- Credit cards
- 401(k), IRAs, Roth IRA, pension and other retirement accounts
- Auto-pay bills
- Safe-deposit boxes
- Business assets
- Annuity contracts
- Savings bonds
- Personal possessions, like cars, homes, real estate investments, etc.
- Insurance policies
UPDATE YOUR BENEFICIARY DESIGNATION FORMS
Many of the assets, bills and accounts you listed in the first step ask you to set beneficiaries in the event that you die. Most of these assets are passed through beneficiary designations, not a will. So, if you haven’t set beneficiaries, now is the time to do so. It is important to make a note in your spreadsheet of who your beneficiaries are for each asset.
SHAPE YOUR ESTATE TEAM
A next important step is to create your estate planning and implementation team. Having a support team in place will keep you on track with tasks and will be your external brain for keeping up with what details are important to manage.
You want a team that offers insightful advice, attentive service and a personal approach to managing your estate plan. Texas Gulf Bank is proud to offer just that. We’d be happy to guide you through the planning process. Other members of your team should include an attorney and accountant. Together, we’ll develop and implement an estate plan that best serves your heirs. A wealth management officer from TGB will assist in determining the best estate plan for you, and work to carry out the plan based on your net worth and financial needs.
Your team is there to provide ongoing support. Establishing an estate plan includes many moving pieces that should be reviewed annually to make any necessary updates. There may be changes in the family (deaths, marriages, divorces, new children, etc.), business or your personal financial situation. Your team is there to remind you to update your plan, and ready to make any necessary changes.
TACKLE YOUR LAST WILL AND TESTAMENT AND TRUSTS
Once your team is in place, the next step is to establish both a will and a trust for your estate plan. The following is a guide, including fundamental documents that ensure your wishes are carried out with regard to what you leave behind.
A Last Will and Testament
A will is a legal document that ensures your assets are passed down to your designated beneficiaries. These assets are usually items that are not covered by a trust, such as your home, your car, your bank accounts or personal possessions. In this process, you’ll name an executor, who is the person or institution that oversees the distribution of your assets.
A will also dictates how those you love will be cared for after your passing. You’ll name a guardian for any minor children and/or pets. You may decide to determine both a legal guardian and a financial guardian for your children, as well as what assets are left for their care.
A will can also outline how you want to be cared for when you’re gone. This may include funeral arrangements, as well as the assets left to make those arrangements.
Create your will with the lawyer you’ve set up on your team using the list of accounts and beneficiary designations you’ve already compiled and evaluated.
Most wills go through a probate process. This legal process is a matter of public record that validates a person’s will, inventories their property, pays off any debts or taxes and distributes the proceeds. For this reason, it’s important that you keep private information (like passwords) in a separate document from your will.
Trusts act in similar ways to a will. You are still passing on your assets, but the instruments operate in different ways. Your trust can own similar assets to those in your will. You will be the trustee of these assets. In addition, you will designate a successor who will take over if you die or are unable to manage your affairs.
Unlike a will, a trust can distribute property while you are still alive. This means if you become mentally or physically disabled, your trust assets can be distributed. Also, unlike a will, a trust usually does not go through the probate process. Finally, a trust can protect you from creditors and allow you to maintain tax benefits*. You still need a will if you establish a trust. A trust won’t contain all of your assets, and it cannot dictate the care of your children or your funeral arrangements.
A trust comes in two forms — revocable (changeable) and irrevocable (not-changeable.) The type of trust you choose will depend upon your estate size.
These steps and essential pieces of information will provide you a solid foundation to build your estate plan. Pulling together these pieces will give you peace of mind that you’ve begun the process and can begin to fill in the gaps of what you may not have in place to maintain your legacy.
Getting started TODAY is possible. Schedule a complimentary consultation with one of our experienced wealth management officers, and we will explain and advise you with regard to how we can tailor our wealth management services to meet your financial needs and goals. Contact our Wealth Management Department at 713-595-7432.
*Consult your tax advisor on how a trust might benefit you, depending on your particular tax situation.
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