Estate Planning

Don’t Leave Your Heirs in the Dark

You feel pretty good about your estate plan. You have an up-to-date will and a trust. You’ve put in place a durable power of attorney, designating your daughter to handle your finances if you become incapacitated. You have a living will and set up your son to make medical decisions, if needed, through a health care proxy. And, all your beneficiaries are in order.  You’ve thought of everything. Right?

Maybe. If you haven’t shared this information with your heirs, you could leave them in the dark at your death. Do you really want to add another layer of stress on top of the other emotions they’ll be dealing with when you die?

There is a simple solution. Keep your loved ones informed before it’s too late.

Consider Arthur and Susan, who were happily married for 45 years when Arthur died unexpectedly.* Arthur always took care of the finances and did everything electronically. He created several passwords and set up firewalls to protect his business and family’s personal information.

Arthur told Susan their wills were in a secure location, but she didn’t know the combination of their safe or how to access their safe deposit box. She had no idea how to access any of their accounts and didn’t know any of the passwords. After Arthur’s death, Susan was emotionally distraught — and stressed and embarrassed because she didn’t know anything about their finances.

Your situation doesn’t have be like theirs.  Here are actions you can take to help ensure your loved ones are prepared.

Tell them about your financial information

Make sure your loved ones know where to look for information about your assets, like how they’re owned and their value. Let them know where to find your will and give them access to your online and paper financial information.

Allow them to pay for expenses

Plan to allow your loved ones to pay for your final expenses and regular bills by giving them access to funds. Sounds logical, but unfortunately, in many cases the probate court can take months to appoint a personal representative or executor. In the meantime, this could put your heirs in the awkward position of having to pay some final expenses out of their own pockets, and seek reimbursement by your estate down the road.

Avoid the probate process

The probate process can take up to a year to complete. It can seem long and complex, but you can avoid probate by putting your assets in a trust, where the trustee has immediate access to the trust assets. This helps your heirs avoid needing to cover your final expenses and other expenses.

Organize your digital assets

Put together a comprehensive list of all of your online accounts, what they mean to you, and where the passwords are located so your loved ones can retrieve important information or access financial assets. If you own a business, give them the information they need. And, don’t forget access to your social media accounts and family photos stored in an online account.

Tell them about your distribution plan

You can alleviate potential family discord by letting your loved ones know ahead of time about your estate plan and how your assets will be distributed. Tell them about any life insurance or annuities you’ve purchased and who the beneficiaries are. Let them know who you named as your personal representative, executor, trustee and guardian, if applicable. Also make sure they know who your financial professional, attorney and accountant are — and vice versa.

Share specific wishes

Maybe you’re an organ donor. You may have a specific charity in mind to receive some money after you die. Or perhaps there’s a special way you want your funeral or memorial handled. Share all your specific wishes with your loved ones.

Let them know sooner, rather than later

Remember, your estate plan doesn’t stop at signing the formal document. Your plan should be shared with your loved ones before you die so there aren’t any surprises. Your goal should be to let your loved ones focus on their emotions and positive memories, rather than stressing about unknown passwords and missing keys.

A well-constructed and communicated estate plan can help ease the stress during a difficult time for your loved ones. To get started, contact a financial professional today.

*This hypothetical example is for illustrative purposes only, and is based on Penn Mutual’s understanding and interpretation of current law. Penn Mutual and its financial professionals and representatives may not give legal or tax advice. These tax discussions are for general information only so you should consult with your independent legal and tax advisors to advise on your situation.

This post is for informational purposes only and should not be considered as specific financial, legal or tax advice. Depending on your individual circumstances, the strategies discussed in this presentation may not be appropriate for your situation. The information in this material is not intended as tax or legal advice. Always consult your legal or tax professionals for specific information regarding your individual situation.


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