A comprehensive financial plan should include estate planning, but many people overlook it. By most estimates, 50% to 60% of Americans don’t have an estate plan.

Many of those who have taken action on their estate planning may believe that it simply means obtaining a last will and testament. But that’s just one piece of the puzzle. A proper estate plan is more complex, with multiple components and documents to consider before it’s complete.

Here are five things you need to know about estate planning:

1. Estate Planning Is a Long-Term Process

Since estate planning focuses on what happens after you pass away, many people wait until their golden years to get started. Unfortunately, accidents happen every day. No matter your age, you should have an estate plan put together. As you grow older, you can update your plan as your assets change and life events occur.

In fact, we recommend that you review your estate plan every three to five years to ensure it’s up to date and accurate. Doing so allows you to account for significant life events like marriage, divorce, death of a loved one, and birth of a child.

2. Estate Planning Isn’t Just for the Wealthy

Estate planning is about more than your net worth; you don’t have to be wealthy to have a plan. After all, estate planning simply legitimizes your final wishes in the eyes of the law.

No matter how much money you have in the bank, you should complete some essential estate planning tasks, including:

• Appointing a financial and medical power of attorney to make decisions on your behalf if you are incapacitated.
  Selecting a guardian for your minor children and pets.
  Naming beneficiaries for your assets and property.

3. You Should Name More Than One Beneficiary

While you may have only one person in mind as a beneficiary for a specific asset, it’s smart to list multiple beneficiaries when possible. For each asset, you can often record both primary and contingent beneficiaries; having a contingent beneficiary ensures that your assets fall to someone of your choice, should your primary beneficiary pass away before you.

But don’t just stop at having multiple beneficiaries for bequests. You should also have a successor beneficiary for other essential roles within your estate plan. For example, having backup plans for positions such as executor, guardian, trustee, and power of attorney ensures that your wishes will be carried out by someone appointed by you and not the state.

4. You Need More Than a Will and Testament

A last will and testament is essential to any estate plan and will likely be your first step in the process. This legally binding document allows you to express how you want your assets to be distributed after you pass away. If your will is executed under sound mind and memory, it’s difficult for someone to contest it.

However, the will is only one piece of your estate plan. Other components include:

• Guardian designations for minor children and pets
  A list of your personal assets
  Beneficiaries for retirement accounts and life insurance policies
  An advance healthcare directive to write your living will and medical power of attorney
  Designation of a financial power of attorney
  A list of all your financial and insurance accounts
  All titles and property deeds you own
  All your digital assets, including login information, photos, and documents
  Funeral instructions and burial arrangements

By compiling these other core pieces, you can ensure that your loved ones have the proper guidance at your time of passing.

5. You Should Discuss Your Estate Plan with Your Loved Ones

Talking about what will happen after you pass is a challenging conversation but important to have with your friends and family. During this conversation, you can reiterate your wishes as laid out in your will and notify your proposed executors, trustees, beneficiaries, guardians, and powers of attorney — and make sure they’re comfortable with the designation. Setting expectations now will also lower the chances of someone contesting your will.

Start Your Estate Planning Now

Creating a thorough estate plan can be difficult without professional guidance. An experienced and knowledgeable financial planner is a crucial part of building a great estate plan. Our Felton & Peel Wealth Management planners are here to help. Please schedule a consultation with us today to get started.