#Fidelity estate planning checklist update

If you don’t have a financial POA, once again the courts pick a guardian for you and that can get messy. With this document, you name a guardian to manage your finances, such as paying your bills and overseeing your investments. For that, you need a financial power of attorney. By creating this document, you can be in charge of your future health decisions, not a judge.Īlthough the living will gives someone the power to handle your medical decisions, it doesn’t give them the right to handle your money. My mother had to go to court just for the right to make his medical decisions,” says Simasko. “When my father had a stroke, he didn’t have anything. For example, these instructions may include whether you want to be kept on life support if you are terminally ill or don’t want blood transfusions for religious reasons. Your living will should serve as a guide for the conservator by listing medical instructions for yourself. The conservator can decide things like whether you will go through with a surgery or take a medication. “For that, you’ll need a living will, also known as an advance directive or medical POA.”Ī living will names a conservator to make medical decisions on your behalf. “A will explains who you want to make decisions for your property after you’ve died, but it doesn’t give your family the right to make medical decisions when you’re still alive,” says Simasko. “It’s amazing how few brokers and banks talk about this feature.”Īnother key part of estate planning is figuring out what should happen if you are alive but unable to make decisions for yourself. “Setting up a transfer-on-death agreement shows your planned distribution and helps avoid delays in transferring the assets,” says Goetz. Your bank and taxable brokerage accounts could also offer a similar system, called a transfer-on-death agreement. Goetz recommends performing an annual review of all these accounts to make sure the beneficiary instructions are correct, and that you aren’t leaving money to the wrong person. “When he died, his mother inherited the money, and now we’ve got to gift the funds back to the spouse while minimizing taxes. “We saw one case where a client forgot he left his 93-year-old mother as the beneficiary for his retirement account, not his spouse,” Goetz adds. Otherwise, the beneficiary instructions take precedence, even if you ask for something different in your will. “The will only applies if you don’t have any beneficiaries listed on these accounts,” says Adam Goetz, a partner at Burstin & Goetz in Pittsburgh and the national president of the MassMutual Advisors Association.

Make sure these instructions are up to date. For your life insurance policies, qualified retirement accounts and annuities, you name a beneficiary to inherit the money after you pass away. One reason a will is not enough is that many accounts follow beneficiary designations. The key point is don’t assume you’ve finished with estate planning just because you have a will. It’s still helpful to get your wishes down on paper, especially if you have special instructions, such as leaving some property to charity. This isn’t to say you should skip writing a will. Most clients plan on leaving their money to their children, which is how the courts would distribute everything anyway.” “If someone dies intestate, the state courts essentially give them a will to distribute the property. Simasko considers a will to be the least urgent of the estate-planning documents, especially for retirees. If you pass away without a will, known as dying intestate, the probate courts make these decisions for you based on state law. It gives instructions for what you’d like to happen if you pass away, such as who would receive your property, who would be in charge of distributing your estate and who would take care of your minor children and pets. Simasko believes that a standard estate-planning toolbox should include a will, up-to-date beneficiary designations, a living will and a financial power of attorney, also known as a POA.Ī will is what people usually think of first for estate planning.

#Fidelity estate planning checklist update

Write a Will and Update Account Beneficiaries