Estate Planning

Estate planning is not just about identifying your heirs. It's about giving a voice to your intentions and dreams. And defining your legacy. A good estate plan provides confidence that important financial, personal, and medical issues can be handled by someone you trust, without unnecessary delay – even in critical times involving illness, disability, or death. At Wells Fargo Advisors, we understand that for some people, the estate planning process may seem challenging. But it's not as hard as you may think. In fact, in the next few minutes, we're going to help make it easier for you by focusing on three basic aspects of estate planning: the five basic documents, beneficiary designations, and estate taxes. Regardless of the size of your estate, most individuals should have five basic documents. The first document is a “will.” A will provides instructions for distributing property that you own at death through probate. Probate is a legal process that supervises the settlement of your estate. Wills can be simple directives of who gets what or can include more complex planning. The second document is a “durable power of attorney.” This document allows you to name a trusted person to manage your financial and personal affairs if you are unable to while you're still living. The third document is a “durable power of attorney for health care.” This is also called a health care directive, or health care proxy. It allows you to name a trusted person to make a wide variety of medical decisions if you cannot, including decisions about end of life care. The fourth basic document is a “living will.” A living will provides instructions about the use of life sustaining measures in the event you should suffer from a permanent incapacity. Although this document expresses what you want, it does not give anyone the authority to speak for you. Sometimes this document is combined with a durable power of attorney for health care. The final document is the “revocable living trust.” Unlike a will, a living trust is in effect during your lifetime. Like a will, it can be altered, changed, modified, or revoked while you're alive. Assets held in a revocable trust avoid probate, which can simplify the settlement. This document is often used in states where the probate process is lengthy or expensive. If your state's probate process is not difficult, a revocable living trust may not be necessary. Experienced estate planners say that some of the most common mistakes in estate planning involve beneficiary designations. When you make a beneficiary designation, the affected assets will transfer directly to the beneficiary and not be subject to probate or governed by your will or trust. Here are some types of assets that allow beneficiary designations. On screen list: • IRAs • qualified retirement plans • annuities • life insurance policies • nonqualified deferred compensation plans • employer granted stock options • employee stock purchase plans • restricted stock awards In some cases, you can name both a primary and contingent beneficiary of these assets. When used carefully, beneficiary designations provide a convenient and inexpensive way to make simple, outright transfers of specific assets. But if beneficiary designations are not kept up-to-date or are not consistent with other parts of your estate plan, they can lead to unplanned or unwanted results. So, it's important to review your beneficiary designations and all your estate planning documents with your attorney. Lastly, recent tax law changes make it very important to review your strategy. Your Financial Advisor can help you with the estate planning process and work closely with your tax and legal advisors to implement the estate planning strategies that make sense for your particular situation and that meet your investment goals. To learn more about the role of the five basic documents, the importance of beneficiary designations, and much more, ask your Financial Advisor for our free series of estate planning reports. Whether it's helping you define your legacy or plan for important life events, at Wells Fargo Advisors, we're with you when you need a Financial Advisor fully invested in you.