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Estate Planning Basics

Do you know that everyone needs an estate plan?

Developing an estate plan is about taking control.

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Many people think that estate planning doesn’t apply to them, but everyone needs an estate plan. A good estate plan will help determine who will:

  • Inherit your assets, such as bank, retirement, and investment accounts
  • Take care of your minor children
  • Make legal and/or healthcare decisions for you if you become ill and incapacitated.

“Developing an estate plan is about taking control. You are controlling how assets are managed and distributed, along with who will handle these tasks when you are unable to do so,” says Deborah Lauer, Planning and Life Events Specialist for Wells Fargo Advisors.

Bottom line: If you don’t decide, someone will decide for you.

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Five Important Estate Planning Documents to Consider

Five estate planning documents
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Your situation’s complexity will determine which documents your plan requires; however, these five are often included in an estate plan:

A will provides instructions for distributing your assets to your beneficiaries when you die. In it, you name a personal representative (executor) to pay final expenses and taxes and distribute your remaining assets.

A durable power of attorney lets you give a trusted individual management power over your assets if you can’t manage them yourself. This document is effective only while you’re alive.

A health care power of attorney lets you choose someone to make medical decisions for you if you are unable to communicate your wishes, or don’t have legal capacity to make treatment decisions for yourself.

A living will expresses your intentions regarding the use of life-sustaining measures if you are terminally ill. It doesn’t give anyone the authority to speak for you.

By transferring assets to a revocable living trust, you can provide for continued management of your assets during your lifetime and after your death — possibly for generations to come.

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If you have an estate plan, remember to review and update it

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Remember, establishing a plan is only the beginning. Significant life events, e.g. relocation to a different state, marriage, divorce, or birth of a child are likely to call for changes to your plan. Lauer explains, “It’s important to regularly review your plan to ensure it continues to meet your needs. You need to consider whether your estate planning documents, asset titling, and beneficiary designations have been coordinated to allow your assets to be distributed according to your wishes. A regular review of who you have named as agent, executor, guardian for minor children, and trustee is important to ensure those named are still willing and able to serve when needed.”

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Turn to a team of professionals

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Taking the first steps to create an estate plan can seem intimidating, but it doesn’t have to be.

The key is to rely on a team of trusted professionals, including a financial advisor, estate planning attorney, and accountant. They know the questions to ask and can help you avoid potential pitfalls.

If you don't currently have relationships with these individuals, a financial advisor is a good place to start. He or she can discuss his or her role in the planning process and can refer you to an estate planning attorney who can work with you to draw up the necessary documents.

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Next steps

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  • Talk with a financial advisor about your estate planning goals.
  • He or she can provide referrals to local estate planning attorneys.

Trust services available through banking and trust affiliates in addition to non-affiliated companies of Wells Fargo Advisors.

Wells Fargo Advisors and its affiliates do not provide tax or legal advice. Please consult with your tax and/or legal advisors before taking any action that may have tax and/or legal consequences.

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