Creating an estate plan can seem like a daunting task – it is uncomfortable to make plans for your own death, and it can seem overwhelming to address every aspect and plan for every contingency. However, once a plan is in place, it can be a relief to know your assets are protected. And, with the guidance of an estate planning attorney, the process is less intimidating. Regardless of the size, value, or complexity of your estate, you should have an estate plan. Proper planning ensures that your wishes are accurately honored and your property passes to the individuals and organizations of your choice.
Where to begin:
1.) Start by listing all your assets
It may help to think in terms of categories: real property, investment property, business ownership interests, IRA accounts, bank accounts, life insurance policies, annuities, etc. This list will help your Attorney determine the total value of your estate and any tax implications.
2.) Gather beneficiary designations
Some accounts – like IRAs, life insurance policies, annuities, or bank accounts – pass upon your death not according to your estate plan, but to a designated beneficiary listed specifically for that asset. It is particularly important to review these designations when creating or changing your estate plan to ensure your assets are handled according to your wishes.
3. ) Know generally what your goals are and who you want to leave property to
List the goals you want to accomplish in your estate plan. Don’t worry about trying to assign a beneficiary to every single asset. Instead, think about the big picture. Your attorney will help you piece together your assets to the right beneficiaries in a way that will minimize tax consequences and fulfill your goals.
4.) Consider who you want to serve as executor
The executor is the person or entity responsible for carrying out the directions of your will. Serving as someone’s executor can be both an honor and a burden. You may select an individual (such as a family member) or a corporate executor (such as Hills Bank) to carry out your wishes. You may also select co-executors to serve jointly.
A trust is a legal document that is used in estate planning. Generally speaking, trusts can usually be divided into two categories: revocable and irrevocable.
We have expertise in administering personal trusts and estates. You may want to consider naming Hills Bank as your estate’s executor, relieving family members of additional responsibilities during a difficult time.
Revocable TrustsLearn More
A revocable trust can be changed, altered, amended, or revoked altogether by the creator (also called the grantor) of the trust. A revocable trust usually provides the trustee with three instructions:
- What happens to your property while you are alive?
- What happens to your property should you become incapacitated?
- What happens to your property upon your death?
Irrevocable TrustsLearn More
Unlike a revocable trust, an irrevocable trust cannot be amended. These trusts usually arise in one of two situations:
- The grantor of a revocable trust has become incapacitated or has died.
- The grantor has put property into a trust for the benefit of another, such as a spouse, children, charity, etc.
Many people utilize combinations of revocable trusts, irrevocable trusts, and wills in their estate plans:
- Trust in a will: Often, wills include provisions that create trusts
- Will and a trust: Even if you choose to set up a revocable living trust, your estate plan will likely still include a will called a “pour-over” will
- Trust in a trust: A revocable living trust may contain provisions that create one or more trusts for the property at the grantor’s death
Please note that neither Hills Bank nor the Hills Bank Trust and Wealth Management Department provide tax or legal advice. You should always consult an attorney along with a tax professional to determine how to prepare the best estate plan for your situation. Investment products are not a deposit, not FDIC insured, not insured by any federal government agency, carry no bank guarantee, and may go down in value.