Be prepared. Important planning steps for various life stages and events

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How to communicate your goals and wishes for yourself and your loved ones.

Very few of us want to face our mortality. Because of this reluctance, you and your spouse or partner may find it awkward to discuss your plans if one of you should encounter serious health problems or pass away. But those conversations are an important part of caring for one another. And developing a holistic plan can help ensure that your wishes are carried out.

“Many people avoid these conversations because they can be uncomfortable,” says Ari Messenger, senior wealth planner, content and strategy at Wells Fargo Wealth and Investment Management. “But as couples learn more about each other’s goals, they can feel confident that should something happen, their wishes will be met.”

With that in mind, Messenger and Deborah Lauer, vice president, estate planning with Wells Fargo Wealth and Investment Management, share how to put a plan in place that could help ensure your wishes are carried out

Designate who should take care of your minor children

One of the first things you should do if you have children under 18 is decide who will look after them in case something happens to you or your partner. “Designating guardians for minor children as part of a will is an essential part of the estate planning process for parents,” Lauer says.

Without those designations, it could be left to the courts to decide guardianship.

“This might be a different person than who is going to handle your money,” Messenger says. “Those roles are something you want to think about separately — who would be the right fit?”

Clearly document your goals and assets

Documenting your goals for your estate and all your assets is an important step to making sure that should anything happen to either of you, settling your estate will be as easy as possible for the surviving spouse or partner. You may be fully aware of assets that are held jointly, but what about those assets that you or your significant other held before your relationship started?

It’s important to identify those assets now to help ensure they are all properly documented and updated. That way, the assets can be transferred or distributed to your chosen beneficiaries.

Then, at a minimum, document your wishes in a will. Having a will in place can help avoid having the distribution of your assets determined through probate. (Probate refers to a court-supervised proceeding that authenticates your will and approves your named executor.)

Create a health care directive

Another important planning step is detailing and documenting the kind of health care decisions you’d want made on your behalf in case you’re incapacitated. Messenger says you should also designate someone in a health care power of attorney document who can look out for your best interests if you’re unable to.

Periodically update all essential paperwork

Besides documenting your goals and assets, you should plan to review and update your paperwork on a regular basis.

  • Will
  • Health care power of attorney
  • Durable power of attorney (for financial matters)
  • Net worth statement
  • Life insurance policies
  • Workplace retirement accounts
  • IRAs
  • Family business documents
  • Rental property
  • Primary residence
  • Automobiles
  • Assets minor children may have, such as a 529 plan to help pay for education, a trust, or a Roth IRA for kids
  • Collectibles, fine art, jewelry, cryptocurrency

“It’s important that each partner maintain an updated net worth statement,” Lauer says. “Typically, whether you’re dealing with unmarried or married partners, there’s always one that has more financial information than the other. An updated net worth statement can help couples better understand how assets are titled as well as beneficiary designations.”

Communicate with family members

Lauer and Messenger agree that keeping family members in the loop can be essential for productive wealth transfer planning.

“Communication with family members is crucial both before and after you’ve created a plan,” Messenger says. That’s especially true if you’re hoping family members will fulfill particular roles in your plan.

“When you’re identifying them in your plan as agents, executors, or trustees, it’s important they know they’ve been named to those positions so there aren’t any surprises,” Lauer says. “If somebody is being named in a legal document, it’s important to ask them if that’s appropriate and to confirm that they want, or are willing, to serve in that capacity.”

Those with blended families and second marriages should keep in mind other unique circumstances that may need to be discussed and factored into your plan.

Get input from your advisors

Reviewing your plans with wealth, legal, and tax advisors can help you follow all the necessary steps, resolve potential issues and demystify the process.

  • A wealth planner can help you identify your key wealth transfer goals and priorities.
  • An estate planning attorney can help you make sure you have all the necessary estate planning documents in place and properly filled out.
  • And a tax advisor can help to determine whether you’re minimizing any potential tax exposure for your estate.

Lauer says the rule of thumb is to review your estate plan every three to five years, or after any big life event, such as remarriage, divorce, moving to a different state, or when your children are no longer dependents. You may also want to review your plans depending on legislation changes — particularly if it impacts tax laws.