Your Money; Navigating your estate plan

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Your Money; Navigating your estate plan

St. Paul Pioneer Press
Copyright 2019 Saint Paul Pioneer Press

The idea of estate planning can be daunting. Even the term itself is intimidating. If the prospect of consolidating your assets into a series of complicated legal documents while directing the right assets to the right heirs seems daunting, you're not alone. And you don't have to go it alone.

By breaking the estate planning process into smaller, more manageable pieces you can take the first steps to ensure that your wishes are carried out.

BEGIN WITH BENEFICIARIES

The easiest place to begin is with beneficiary designations. If you have a 401(k), 403(b), or other retirement savings account, you have already established a beneficiary. Found on life insurance policies and retirement accounts, beneficiary designations simply dictate who will receive the account assets upon your passing. They also have tax implications; not naming a beneficiary means your assets may become taxable five years after death.

Naming a beneficiary isn't enough, however. Your beneficiary designations actually supersede your will, so you will want to review them on a regular basis. Our recommendation is to revisit your designations at least once a year.

THE WILL PROVIDES THE WAY

If you've started estate planning, you might have started with a will. Your will can prevent the loss of thousands in needless taxation and can ensure experienced management assistance for your family. If you have dependents, it is important to establish who will serve as guardian in the event of your passing, or if you and your spouse become incapacitated.

As with beneficiary designations, you'll want to update your will regularly, especially after a life event such as divorce or retirement.

DIRECTIVES: HELPING YOUR FAMILY THROUGH A DIFFICULT TIME

While we hope you will never need them, health care directives can relieve your family of an enormous burden in the event you are no longer able to make health care decisions. You might already be familiar with a living will, a written statement that outlines what kinds of treatment you do or do not want if you are incapacitated. Another document, known as a health care proxy, designates someone to make medical decisions on your behalf. Make sure to use your state's statutory forms and that all concerned parties (not just your doctor) have copies. This will ensure to ensure your final wishes are carried out and potentially prevent conflict among family members who might disagree about your care.

A power of attorney is similar to health care directives, but for financial decisions. Simply put, it allows you to designate someone to step in and manage your finances should you become incapacitated. A power of attorney is especially important if you are single because without one, a court will decide who serves as your financial guardian, and the guardian of your assets.

FINE TUNE YOUR PLAN WITH TRUSTS

If you have a lot of assets or a particularly complicated estate, you might consider a trust. Trusts are legal arrangements that hold assets on behalf of a beneficiary or beneficiaries. There are three primary types of trusts. Revocable trusts are used to avoid probate, a lengthy and expensive process that can keep assets tied up for years. Irrevocable trusts allow you to relinquish control of your assets, protecting you and your heirs from possible estate taxes. Testamentary trusts only go into effect upon your death, offering flexibility to designate an heir, though your assets will not necessarily avoid probate.

As you move forward with your estate plan, it is important to coordinate the various legal documents. A financial adviser can help you align each component of your plan with your overall goals.

IMPORTANT DISCLOSURES

This article was licensed through Dow Jones Direct.  

The opinions expressed herein reflect the judgment of the author(s) at this date, are subject to change without notice, and are not a complete analysis of any sector, industry, or security. The content provided herein does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting or other material considerations. Recipients should not rely on this material in making any future investment decision. To the extent that the reader has any questions regarding the applicability of any specific issue discussed above to their specific portfolio or situation, you are encouraged to consult with a qualified lawyer, accountant, or financial professional.

Securities, insurance, and advisory services offered through BOK Financial Securities, Inc., member FINRA/SIPC and an SEC registered investment adviser. Services may be offered under our trade name, BOK Financial Advisors. Investment and insurance products are: NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

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BOK Financial Corporation (BOKF) offers wealth management and trust services through various affiliate companies and non-bank subsidiaries including advisory services offered by BOKF, NA and its subsidiaries BOK Financial Asset Management, Inc. and Cavanal Hill Investment Management, Inc. each an SEC registered investment adviser. BOKF offers additional investment services and products through its subsidiary BOK Financial Securities, Inc., a broker/dealer, member FINRA/SIPC, and an SEC registered investment adviser and BOK Financial Private Wealth, Inc., also an SEC registered investment adviser.

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