Estate Planning: Do You Have a Plan?

Many Americans believe estate planning is something they don’t need to be concerned about.

It’s for wealthy people with millions in assets. It’s too complicated and expensive to even consider. It’s not necessary, because whatever assets they have will get passed on appropriately to their beneficiaries anyway.

The reasons go on and on in the same vein. If you are one of the people who thinks this way, you may be making a mistake. But you have a lot of company.

Survey Shows the Need for Estate Planning

According to a 2010 survey by Lawyers.com, a leading legal website, only 51 percent of Americans have estate planning documents when you combine all categories – wills, living wills, power of attorney and trusts.¹

When you look just at wills, only 35 percent of Americans have one, the survey said.¹ Being without a will is not a good idea.

What If You Don’t Have a Will?

A will and an estate plan help ensure your beneficiaries receive the assets that you want them to receive. If you die without a will, the state will make decisions on your behalf. It may also cause higher expenses and delays in settling the estate.

So if you haven’t done any estate planning, think about it. At the very least, get a will. Simple wills are probably sufficient for the majority of people and are not expensive. Keep in mind, this is an important legal document and consulting with an attorney is a wise way to proceed.

If you want to explore the do-it-yourself approach, you can find legal software on various online sites.

Getting Started with Estate Planning

In addition to a will, consider these important components for an estate planning checklist:

• Life insurance. When you die, beneficiaries typically receive the death benefit proceeds free of federal income tax.
• Beneficiary designations on retirement accounts, annuities and life insurance.
• A durable power of attorney. This legal directive allows someone you designate to make decisions on your behalf if you become physically or mentally incapable of doing so. 
• Medical directives, also called "living wills." These directives help ensure your medical care is in line with your values, even when you're unable to communicate them. 
• Guardianship designations for minor children. 
• A succession plan for any small-business ownership stake.

Update Your Estate Plan As Needed

Once you have a will and your estate plan is in place, review them periodically and adjust for changes in your life, such as marriage or divorce, entering into a domestic partnership or civil union, birth of a child, a move to another state, death of a beneficiary, and a sudden financial gain.

You’ve worked hard during your life to build a certain level of financial security. At life’s end you want what assets remain to pass on to your beneficiaries. The best way to make sure your wishes are fulfilled is through estate planning.

¹ Lawyers.com Wills & Estate Planning Survey, 2010

This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

"The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries.

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