Your estate plan documents how you want your assets to be distributed in the event of your death. It controls your financial assets, which may include a 401K account, bank accounts, Certificates of Deposit, and IRAs. It also states who should receive your property, such as your home, jewelry, or anything with monetary or emotional value. It’s important to have an estate plan that will carry out your wishes after you die.
A financial plan takes into account your current income, your future expected income, the value of the assets you own, investments, and how you plan to withdraw your savings over time.
It’s very important to have your financial plan be a part of your overall estate plan, to prevent misunderstandings and errors when it comes time to disburse your assets.
One major step that must be taken, and reviewed periodically as your assets, health, and future plans change, is to update the beneficiaries on all of your financial accounts. When you set up a 401K through your company, or establish life insurance or an IRA, you will fill out a form that names the beneficiaries of these assets in the case of your death. Those beneficiaries you name will be the ones to inherit those assets, even if you name someone else in your Trust or Will as the heir to those assets. The beneficiary form overrides who is named in your Trust or Will.
Any situation such as retirement, remarriage, or changes in the lives of your beneficiaries can have a major impact on your estate plan. To review or develop your financial plan to make sure it incorporates your estate planning goals, contact Tom Tearney, VP & Senior Trust Officer at Home State Bank’s Trust & Wealth Management Department in Crystal Lake.
Thomas A. Tearney, CFP
VP & Senior Trust Officer
Home State Bank
Trust & Wealth Management