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Why Your Will May Not Be Enough. Do You Need an Estate Plan?

Disclaimer: This article contains information that was factual and accurate as of the original published date listed on the article. Investors may find some or all of the content of this article beneficial but should be aware that some or all of the information may no longer be accurate. The information and/or data in this article should be verified prior to relying on it when making investment decisions. If you have any questions regarding the information contained in this article please call IFA at 888-643-3133.

Will Sign

I like chocolate. But one taste of cocoa in its natural state can threaten the relationship. As a component of a delicious candy or brownie, it’s perfect; on its own, it isn’t enough.

You probably know that you should have a will in place, especially if you have kids. But do you know that alone, your will may not be enough? True, it plays a valuable part in your estate plan, but it is only one component.

We’re not suggesting that everyone needs an estate plan. But we are suggesting that everyone should know whether or not they need one. Of course, just knowing isn’t enough. Consider these statistics from a recent Spectrem Group poll that showed surprisingly low rates of estate plans among the 750 participating millionaires:

  • 62% of respondents with at least $1 million in investable assets; and
  • 68% of those whose investable assets are more than $5 million.

If your situation warrants an estate plan, we’d like you to consider the value of having a team to help you with it. Of course, an attorney or another professional who is well-versed in this specialized area will play a key role. And to make sure your hard-earned assets are handled properly, you should also involve a financial advisor. Our team of expert advisors at IFA can quarterback the development and execution of your estate plan, working with your choice of professionals or recommending one for you.

There are many reasons you should think about an estate plan. Among them:

  • Avoiding probate and privacy concerns. The probate process can take a year or more, even when it is uncontested. The timing could put unnecessary burdens on your heirs, especially if they counted on you as a source of income. Probate fees may be considerable, taking 5% or 6% of the estate. And don’t forget that probate court records are public, so anyone can access your private information – including those who may want to dispute your arrangements.
  • Proper titling of your assets. The people you designated as owner or beneficiary on each of your assets are the people to whom those properties or assets will generally pass upon your death – regardless of your will. As part of your estate plan, you should examine each designation carefully to make sure you have named the right people for your circumstances today, rather than when the account was opened or the property purchased.
  • Business Succession. If you own a business, figuring out who will take over is an important part of the estate planning process.
  • Special needs. If you are caring for a dependent who has disabilities, you may need to make special provisions for that individual’s care when you are no longer able to do so. Or, if you have a blended family, you may want to treat individual family members differently in your estate plan. If ex-spouses are involved, it is important that you decide how they should be treated upon your death, and add to or eliminate their name from your assets.

Creating an estate plan can avoid the chaos that may come upon your relatives when you die. Along with creating the plan, make sure you and your team review it periodically to ensure it keeps up with changing tax-codes and family dynamics. While it’s true that a simple will may meet your needs, but if your estate is large or even a little bit complicated, you may need more. If you decide that you need an estate plan, your IFA advisor can help you find the resources you need. We can also oversee the planning process and help you recognize and then structure the plan in a way that may avoid unnecessary taxation to your heirs. Ask us for more information.

For more information on how Index Fund Advisors can help with your financial needs including an estate plan, complete this form, or give us a call at 888-643-3133.