Protecting Your Legacy: The Importance of a Well Designed Estate Plan

Having a well-designed estate plan is a critical part of the financial planning process. At Wisely Advised, we believe that proper estate planning has an important role in helping protect the assets you have worked hard to build and in creating a lasting legacy for the people and causes that matter most to you. A thoughtful plan can help ensure that your wishes are clearly documented, your assets are properly coordinated, and the people you care about are prepared for the future.

Why A Trust?

A trust is a legal arrangement that allows you to place assets under the control of a trustee for the benefit of designated beneficiaries. One of the most common types is a revocable living trust, which generally allows you to maintain control of your assets during your lifetime while providing flexibility to change or revoke the trust.

Including a trust in your financial plan can provide several benefits, including greater control over how and when assets are distributed, a framework for managing assets in the event of incapacity, and potentially avoiding probate when properly established and funded.

A trust can also help coordinate the distribution of different types of assets and ensure your wishes are carried out for the people you care about most.

Beneficiaries Matter

One of the most important steps in establishing a trust is making sure your financial accounts and other assets are properly coordinated with it. Depending on the type of asset and the goals of the estate plan, this may include retitling assets in the name of the trust or naming the trust as a beneficiary. The trust can then provide a framework for how those assets are managed during your lifetime and how they are ultimately distributed to the beneficiaries you have chosen after your passing.

Simply creating a trust does not automatically place your assets under its control. Retirement accounts, life insurance policies, investment accounts, and other assets may require separate beneficiary designations or ownership changes. Properly coordinating these assets with your trust helps ensure that the assets you have worked hard to build are passed to the beneficiaries you intend and according to the wishes outlined in your estate plan.

Keep Your Documents Updated

Having a revocable living trust gives you the ability to update your estate plan as your life and circumstances change. Your family, relationships, financial situation, and assets may look very different over time, and your estate plan should evolve with them. Major life events such as marriage, divorce, the birth of a child, the death of a beneficiary, purchasing or selling a home, changes in your financial situation, or moving to another state may all be reasons to review your plan. Even without a major life event, regularly reviewing your trust, beneficiary designations, and other estate documents can help ensure everything remains current and continues to reflect your wishes.

Review Your Estate Plan Annually

Even when your circumstances have not changed, it is important to review your estate plan at least once a year. An annual review does not necessarily mean that changes need to be made; rather, it gives you an opportunity to confirm that your will, trust, beneficiary designations, financial and property records, and the individuals you have chosen to help manage your estate still reflect your wishes. Taking the time to review your plan each year can provide confidence that you understand exactly how your estate is currently structured and that all of the pieces continue to work together as intended.

The Bottom Line

At Wisely Advised, we believe having a well-designed living trust is a critical part of a comprehensive financial planning process. It can help provide confidence that the assets you have worked hard to build are protected, properly coordinated, and ultimately passed on to the beneficiaries you choose as part of your legacy. Regularly reviewing your estate plan helps ensure it continues to reflect your wishes and the legacy you want to leave behind.