Introduction to Estate Planning

If the phrase “estate planning” makes you think of millionaires, you’re not alone. But you’re also on the wrong track — anyone can and should have an estate plan.

Why You Want One

An estate plan is a group of documents that ensures your wishes will be followed when you pass away or become incapacitated. It spells out how your money, home and other assets will be distributed; who will care for your minor children; and who is allowed to make decisions in your place should you not be able to do so — for instance, due to an accident or illness. 

Without appropriate estate planning documents in place, the court system makes the decisions. That can be a costly, lengthy process that may also create disputes and tax burdens for your family. 

But there’s more: You can also use an estate plan to help with tax management, such as reducing the taxes your heirs will have to pay or even creating deductions from your own current income tax. Other documents could help you plan for expenses related to your children’s education or your parents’ medical or long-term care needs. 

What’s Included

At its most basic, an estate plan could simply be your will. Other common — and some experts say essential — components include: 
• Power of attorney for financial decisions 
• Medical power of attorney or healthcare proxy 
• Living will or advance medical directive (specifying your wishes regarding life-prolonging medical care) 

You may also want to add: 
• One or more trusts, such as a revocable living trust, irrevocable trusts, family trusts and so on 
• Life and/or disability insurance 
• Financial provisions and preferences for your funeral arrangements 

Steps to Prep

There are numerous federal and state laws regarding inheritance and estates, so it can be smart to work with an estate planning attorney in developing your plan. However, it can help to do a little preparation on your own. 

Start by listing your assets, such as: 
• Bank accounts 
• Investment and retirement accounts 
• Insurance policies 
• Real estate 
• Personal property (jewelry, artwork, etc.) 

Next, consider these questions: 
• Who do you want to inherit your assets? 
• Who do you want to handle your financial and medical decisions if you can’t? 
• Who do you want to care for your children if you can’t? 
• How do you feel about life-support measures should you become critically ill or injured? 

Share Your Plan

Once your estate plan is complete, take time to discuss it with your family and others who will be affected. And make sure that key people can access these important documents when the need arises. 

Who should be your executor or successor trustee? 
While your estate planning attorney will guide you down this path, you should also know that Rabobank N.A. has a Wealth Management Division, and they are frequently named in wills and trust documents to handle the administration of customers’ estates either at their incapacity or at their death. 

Naming Rabobank shifts the burden from family members or friends — who may not have the time or expertise to handle all that needs to be done — to a corporate entity that provides this service and expertise every day. Learn more about Rabobank's Wealth Management Division or call one of their representatives to further discuss their services.

Reminder: Choose Your Beneficiaries 
Fill out beneficiary forms on your retirement accounts, since these assets pass directly to heirs – even without a will or other estate plan documents.

The information contained in this article is intended for general educational purposes only and is not to be construed as legal, tax, or financial advice. Please consult with your own legal, tax or financial advisor for guidance with your own particular circumstances.