Follow this checklist to help make wealth transfer planning a more positive experience.
Talking about what will happen when you or your spouse passes away can be uncomfortable. But working together to create a wealth transfer plan now can help both you and your spouse make arrangements for your wishes to be fulfilled while avoiding any unwelcome surprises for your heirs, including the surviving spouse.
“One positive of having a well-thought-out plan is knowing that those important decisions involving wishes for your family are already made,” says Bob Robes, senior wealth planner at Wells Fargo Wealth and Investment Management.
With that in mind, this checklist of five actions to consider could help make your wealth transfer planning a positive, productive experience, for both you and your spouse.
- Outline your goals and objectives.
Start by having a candid conversation with your spouse about your goals for wealth transfer. Consider scenarios addressing when the first spouse passes and what you want for your heirs at the passing of the second spouse. Robes says your immediate goal is to complete certain planning documents (more on that below) to help make sure your assets pass to your spouse and family members in accordance with your goals and wishes and avoid having your estate go through probate, which can be time-consuming.
“If you’ve done your proactive planning,” says Robes, “you will have considered potential scenarios and made those decisions, which should result in your estate being administered more smoothly.”
- Do a thorough inventory of your assets.
Oftentimes, the surviving spouse has detailed knowledge of the assets composing the deceased spouse’s estate, especially if a substantial portion of those assets are held jointly. But it’s possible that some assets, including long-term investments your spouse created before your marriage, may have fallen off the radar. It’s important to identify those assets now to help ensure they are all properly updated. That way, the assets can be transferred or distributed to your chosen beneficiaries.
- Review and update essential paperwork.
You’ll want to inventory and periodically update paperwork needed to administer your estate. That could include documents from both you and your spouse related to all manner of assets, including:
- Life insurance benefits
- Retirement accounts
- Family business documents
- Rental property
- Communicate with family members.
Keeping family members in the loop can be essential for making wealth transfer planning smoother, Robes says. Though strong communication thrives in many families, Robes recommends that those with blended families and second marriages err on the side of over-communicating.
“Informed family members should know what to expect,” Robes says. “Even if they don’t agree with your plans for transfer, there should be no surprises. That can go a long way in avoiding conflict down the line.”
Generally, the rule of thumb is to review your estate plan every three to five years, but you don’t have to wait that long for a review.
- Review your plan regularly with wealth transfer specialists.
Regular reviews with your wealth, legal, and tax advisors can help you keep track of how effective your plan may be. A wealth planner can help you identify your key transfer goals and priorities. An estate planning attorney can help you make sure you have all the necessary estate planning documents in place and properly filled out. And a tax advisor can determine whether your wealth transfer plan helps to minimize any potential tax exposure for your estate.
Generally, the rule of thumb is to review your estate plan every three to five years, but you don’t have to wait that long for a review. “Changes in wealth may necessitate a change in one’s plan,” says Robes. “So if a major life event occurs or if legislation changes, that could be impactful to your estate plan and create an opportunity to engage your advisors in a review.”
Keep in mind that not every life change may be an obvious trigger to revisit your plan. For example, many provisions in estate planning documents are state-specific. So be sure to review your estate plan for needed updates if you are moving to another state, especially from a community property state into a separate property state or vice versa. Staying connected with your wealth, legal, and tax advisors can help you keep your plans in line with your evolving objectives and financial situation.
Wells Fargo Advisors does not provide tax or legal advice. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.
Insurance products are offered through nonbank insurance agency affiliates of Wells Fargo & Company and are underwritten by unaffiliated insurance companies.