Estate planning can feel overwhelming, especially if we’re planning how to care for those beyond our immediate family. While our closest relationships may be with a spouse or partner, they could also be with friends, parents, siblings, or even our pets. We have the family that we are born into, but many of us also have a chosen family. We may have causes that are near to our heart, as well. Take the time to plan for who and what matters most to you by considering these five helpful tips.
First, make a list of who would be impacted financially if you were no longer here. Beyond a spouse or children, who else is financially dependent on your income? Do you provide support to your parents each month or perhaps you anticipate providing help in the future? Could your roommate maintain the existing lease if you were not here to pay your share? Make it a priority to ensure that you can continue to support loved ones and chosen family, including outside of immediate family.
Second, review and print a copy of each confirmed beneficiary designation. Naming your beneficiaries identifies the individuals or organizations that will inherit your assets. Updating these documents after each life event, such as a marriage, divorce, a new baby or the passing of a loved one, is extremely important to ensure that your financial wishes are carried out in the event of your absence. This is true even if the loved one isn’t considered a “traditional” beneficiary, like a dear friend and neighbor!
Third, beyond your home and your financial accounts, assess your personal possessions. Do you own items of historical significance that would impact your community if housed in a museum? Did you purchase something while on a trip with a friend and would like that person to receive it after you have passed on? Consider where you would like these items to end up and how your treasures can provide the greatest benefit.
Fourth, don’t forget to plan for your pets, as they are also chosen family. Do you have a trusted loved one that will care for your animals? Will they need financial resources to do so in sickness and in health? Knowing who will care for your pets and having resources set aside for them can bring a little extra peace of mind.
Lastly, reflect on how you would like to be remembered. Do you want to make an impact on causes that are important to you? Financial bequests can be used to help improve food security for the most vulnerable in your community, provide educational resources to first-generation college students or even advance medical research for conditions like heart disease or cancer. A CERTIFIED FINANCIAL PLANNER™ professional can help you efficiently earmark assets for charities that represent the causes that mean the most to you.
Consider using these tips to begin examining your financial planning obligations and wishes, regardless of your age or health. Taking time to plan for the ones you love, and the causes and possessions that are important to you, is one of the best ways to continue caring for them. Find a CFP® professional today to discuss your wishes and how best to incorporate those considerations into your financial plan.
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