How to Make Estate Planning Less Complex

Estate planning used to be all about getting your financial affairs in order to take care of your family, but for boomers, it’s expanded to also include leaving a legacy and making a difference in the world after death.

Over the past decade, expiring exemptions and federal tax rates have made estate planning a challenge for both consumers and financial planners, so taking the time early in or even before retirement can help ensure your wishes are carried out.

When creating a plan, experts advise discussing it with your loved ones, making a list of all of your money accounts and the location of all important legal and investing documents.

To help reduce some of the complexity in creating an estate plan, Marc List, managing director at CBIZ MHM discussed the following tips for boomers:

Boomer: What types of assets should boomers take into account when they start to figure the value of their estate?

List: They should take into account all of their assets, including retirement accounts, life insurance, amounts already in trust and potential future amounts they may inherit.

Boomer: Is there an advantage to leaving assets in a trust and if so, why?

List: Yes:  Assets in a trust are protected from creditors, and, if done correctly, this can also include potential future ex-spouses. In addition, if structured properly, assets in trust can pass through several generations without being subject to future estate taxes. The biggest disadvantage is that there may be a higher income tax in the trust than outside of the trust.

Boomer: What should I take into consideration when selecting a power of attorney? What responsibility would this person have over my estate?

List: Granting someone a power of attorney allows them to handle your financial affairs, and could include gifting assets and doing estate planning. Powers can be limited if desired. In addition, some states allow power to "spring" only upon the occurrence of an event – such as incompetency.

Boomer: When listing all of my financial accounts, what should be included?

List: The best information to give your advisors is the proper titling of the account, the value of the account, and the basis of the assets in the account. In addition, are you expecting any future inheritances. Make sure to distinguish retirement accounts, including the type of retirement account.

Boomer: Is a will considered part of estate planning? An other than financial assets, what needs to be included in a will?

List: A will is considered part of the estate planning. Other considerations include naming a guardian for your children, a custodian of money for your children (they may or may not be the same), appointment of a personal representative and/or trustee, nomination of a health care surrogate to make medical decisions for you including a living will.