Financial Focus Joseph Ortiz

Like everyone else, you want to leave a legacy. To make it happen, though, you need to do some estate planning. For most of us, that sounds like a scary task, but it doesn’t have to be — as long as you break it down into a few key moves. 

Here, in a nutshell, are some of the broad-based moves you’ll want to consider:


Communicate your wishes. 

When drawing up your estate plan, you can’t leave anything to chance — so you need to communicate your wishes in writing. This means you need to draw up the appropriate legal documents, such as a will and a living trust. If you die intestate (without a will), your belongings will be distributed to your “heirs” as defined by state laws — and these distributions may not be at all what you had in mind. If you want to avoid probate and possibly draw up more complex instructions, for instance, leaving different amounts of money to different heirs at different points in their lives — you may also need to create a trust. 


Protect your family. 

When you hear the words “estate planning,” your first thoughts may be of what you can leave behind to grown children, grandchildren and even great-grandchildren. But if you develop your estate plan while your children are young — and you certainly should — you should name a guardian for them in case both you and your spouse were to die prematurely. Of course, you’ll also need to consider having the right type and amount of life insurance for survivor income and loan repayments. 


Position your investments to benefit your heirs. 

You can arrange for some of your investments to provide significant benefits to your heirs. For example, you can stretch your IRA to extend the key benefit of IRAs — tax-deferred earnings — over a period of several years. You should also make sure you’ve updated beneficiary designations on various accounts, such as annuities and 401(k) plans, to make sure the assets go to the right people. These designations are very important, as they can supersede even the instructions in your will.


Protect against incapacity. 

None of us can predict the shape of our physical and mental well-being in the years to come. But to protect your family, you’ll certainly want to be prepared for everything. That’s why you’ll want to make the appropriate arrangements, such as establishing a power of attorney and health care directive, while you’re still healthy. These types of documents will empower family members, or other people close to you, to take the necessary steps to carry out your wishes even if you become incapacitated. As with other aspects of your estate plan, however, you’ll want to review these arrangements periodically to make sure they still reflect your current thinking.

To make any of these moves — in fact, to make any moves at all related to estate planning — you’ll need to work with a team of professionals, including your tax, legal and financial advisors. Comprehensive estate planning can be complex and time-consuming, but it’s worth the effort.

This article was written by Edward Jones for use by Ahwatukee Foothills Edward Jones Financial Advisor Joseph B. Ortiz, AAMS, CRPS. Reach him at (480) 753-7664 or Accredited Asset Management Specialist and AAMS, Chartered Retirement Plans Specialist and CRPS are registered service marks of the College for Financial Planning.

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