Estate Planning: Not Just for the Wealthy

Why It Matters:

  • 60% of American adults don’t have a will.
  • You don’t have to be wealthy to benefit from an estate plan.
  • Failing to prepare can lead to frustration and headaches for your loved ones.

Aaron Lopez tkc.profilePicture Written by: Aaron Lopez | Transamerica
July 19, 2018

5 Min readClock Icon

A few of life’s common misconceptions:

Dwayne Johnson has a starring role in 99% of Hollywood films. (It’s actually less than 5%.)

When talking on a cell phone in public, no one else can hear you. (In fact, you’re really loud.)

Estate planning only applies to the wealthy. (Just about everyone can benefit from an estate plan.)

Regardless of age, gender, or income level, you don’t have to be The Rock to need an estate plan — even at the most basic levels.

“Estate planning gets overlooked because people think it’s complicated,” said Chris McGovern, a director with Transamerica’s Advanced Markets Group . “They think, ‘Oh my god, that’s what rich people do. Estate planning doesn’t apply to me.’ It’s not about multimillion dollar trusts. It’s about how you want your assets to pass on and who you want them to pass on to.”

A survey by Caring.com found that roughly 60% of American adults don’t have a will. Of that group, nearly half said they “haven’t gotten around to it,” while 29% said they didn’t have enough assets to leave to anyone.

Getting started

The details of an estate plan will depend on your life stage. If you’re young and just embarking on a career, there might not be much to include. But here are a few things you don’t want to overlook:

  • Workplace retirement accounts such as a 401(k): A little-known fact is that the beneficiary designation on your retirement account supersedes that of a will.
  • The guardianship and care for any pets: For legal purposes, pets are considered property, so be sure to include them in a will.
  • A home for your collectibles: Vinyl sales have increased 12 straight years, while comic books, coins, stamps, and sports cards get passed down through generations.
  • Upon further review, you’ll likely discover some assets worth adding to an estate plan.

More established

By the time you hit your prime earning years, your life situation can guide your estate planning strategy. You might own a home and be married with children. If so, it becomes more important to create a will and consider naming a power of attorney in the event you experience severe health problems.

“Do you have a plan in place if you were to become incapacitated or get sick?” McGovern asks. “It’s about planning for incapacity — not just for after you’re gone.”

Retirement accounts, investments, and life insurance become a larger part of the conversation at this stage. If you’re working with a financial professional, estate planning should be included when discussing your overall financial strategy.

Someone in your corner

As retirement approaches, a financial professional can be one of your most valuable resources.

Steven Sweeney, another director with Transamerica’s Advanced Markets Group, compares financial professionals to athletic coaches, both of whom recognize the importance of small details when looking at the big picture.

“The most successful financial professionals, and coaches for that matter, put their clients’ needs ahead of their own,” Sweeney says. “Engaging in an estate planning conversation can make a huge impact over the long run.”

For those with a more complex financial strategy, a financial professional might be part of a larger team. He can work with your tax professional and attorney to help ensure the puzzle pieces fit together correctly.

Other resources

If you’re comfortable flying solo (or enlisting an attorney), it’s relatively inexpensive to draft a will. The average cost is about $375, according to LegalZoom.com.

You can also delve deeper into estate planning topics here on Transamerica’s Knowledge Place, which features content from digital estate planning company Everplans. And we’d be remiss not to mention the aptly named EstatePlanning.com.

These resources can help create a strategy to make things easier for your family once you’re gone. Because, let’s face it: In real life, Dwayne Johnson isn’t coming to the rescue.

Things to Consider:

  • Start an estate planning conversation with your financial professional.
  • Take stock of assets that might need to be included in an estate plan.
  • Draft a will and review beneficiary designations on your retirement accounts.

Neither Transamerica nor its agents or representatives may provide tax, investment, medical, or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.

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