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. Deborah Lauer, estate planning consultant with Wells Fargo Wealth & Investment Management, shares tips on how to do this.

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.

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 determines the distribution of your assets (individual assets without beneficiary designations) during probate. (Probate refers to a court-supervised proceeding that authenticates your will and approves your named executor.)

Create a health care power of attorney

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. You should designate someone in a health care power of attorney 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 (asset values and titling)
  • Beneficiary designations on assets, such as:
    • 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 custodial account, or a trust (review to ensure successor owners, custodians, or trustees are named)
  • 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

Keeping family members in the loop can be essential for productive wealth transfer planning. 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 financial, legal, and tax advisors can help you follow all the necessary steps, resolve potential issues, and demystify the process.

  • A financial advisor 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.
  • A tax advisor can help determine whether you’re reducing 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 they impact tax laws.

Wells Fargo advisors is not a legal or tax advisor. However, we will be glad to work with you, your accountant, your tax advisor, and/or your lawyer to help you meet your financial goals.

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