Estate Planning - Getting Started

Creating an Estate Plan can seem like a daunting task—it is uncomfortable to make plans for your own death, and it can seem overwhelming to address every aspect and plan for every contingency. However, once a plan is in place, it should be a relief to know your goals are protected. And with the guidance of an Estate Planning Professional and Attorney, the process is less intimidating.

Regardless of the size, value, or complexity of your Estate, you should have an Estate Plan. Proper planning ensures that your wishes are accurately honored and your property passes to the individuals and organizations of your choice.

Where to Begin

1. Start by listing all of your assets. It may help to think in terms of categories: real property / real estate, investment property and accounts, business ownership interests, IRA accounts, bank accounts, life insurance policies, annuities, etc. Assign an estimated value to each item. Also list how each asset is titled – do you own this property individually, or with someone else? This list will help your Estate Planning Professional and Attorney determine the total value of your Estate and any tax implications that may exist.

2. Gather beneficiary designations. Some accounts like IRAs, life insurance policies, annuities, and/or bank accounts can pass upon your death not by your Estate Plan, but by a designated beneficiary listed specifically for that asset. Obtain copies of your current beneficiary designations from the financial institution or insurance company. It is particularly important to review these designations when creating or changing your Estate Plan to ensure your assets pass according to your wishes.

3. Know generally what your goals are and who you want to leave property to. List the goals you want to accomplish in your Estate Plan. Do you want to make sure your children or grandchildren have a college fund? Is there a charity that you want to support? Do you have a loved one with special needs you want to take care of? A common pitfall is getting bogged down trying to assign a beneficiary to every single asset. Instead think about the big picture, then your Estate Planning Professional and Attorney will help you piece together the assets to the beneficiaries in a way that will minimize tax consequences and fulfill your goals. For now, focus on the overarching results you would like to accomplish.

4. Consider who you want to serve as Executor. The Executor is the person or entity responsible for carrying out the directions of your Will. Serving as someone’s Executor can be both an honor and a burden. Generally speaking, an Executor has primarily two responsibilities:
(1) protecting the deceased person’s property until all debts and taxes have been paid; and (2) making sure what is left gets distributed to the people or organizations that are identified in the Estate Plan.

To accomplish these responsibilities, the Executor must follow the steps of the law, which include petitioning the court to probate the Will, sending legally required notices, preparing an inventory of all assets, paying debts and expenses, filing tax returns, settling any claims and closing the Estate. It might also involve winding up a business, selling a home or protecting the value of an important collection.

You may select an individual - such as a family member - or a Corporate Executor - such as Decorah Bank & Trust Co. You may also select Co-Executors to serve jointly. Consider carefully the extent of these duties and the responsibility associated with carrying them out when selecting an Executor. You should also name an alternate Executor in the event the primary Executor is unable or unwilling to serve.

Estate Planning may feel like a difficult task, and a large undertaking. It is often a topic avoided by many, but it’s something everyone needs to think about. It doesn’t need to be overwhelming – partnering with an Estate Planning Professional, such as the Trust Service Team at Decorah Bank, and a quality Estate Planning Attorney, can help simplify the process. Please reach out if there are questions. The Trust Services Team is here to assist individuals just getting started with Estate Planning, as well as individuals who are wanting to review, and potentially update, an existing estate plan.