Protect those you love with estate planning

When some people hear the words “estate planning,” it’s easy to think it’s only for the very wealthy squirreling away large sums of money for their heirs. In reality, estate planning is for any of us. An estate plan helps protect your loved ones financially in case the worst happens—and if worse comes to worst, they may be comforted by the fact that you’ve planned ahead. A little advance planning can go a long way.

Do I need an estate plan?

It used to be that estate and gift taxes applied only to the very wealthy. Now, millions of Americans are in a position where estate planning makes sense. If you agree with one or more of the following, then you should consider the benefits of establishing an estate plan:

• I want to maximize the value of my estate and keep taxes as low as possible.
• I have assets in excess of the current estate tax exemption limit.*
• I have minor children who need an appointed guardian.
• I have a large portion of my assets in a retirement plan.
• I am the beneficiary of a trust.
• If I am incapacitated, I wish to have someone act on my behalf. 

* View the current year’s limit here.

Even if these points don’t describe you to a tee, an estate plan can help your survivors by providing them valuable information in the event of your death or incapacitation due to illness. Think of an estate plan as a collection of documents and other items such as:

• Current will—Establishes your final wishes.
• Health care proxy—Designates someone to make health care decisions on your behalf in the event you no longer can.
• Durable power of attorney—Gives someone else permission to manage your affairs if you become disabled or incapacitated.
• Revocable trust—Passes assets to your beneficiaries without the delay or expense of probate — an often costly and time-consuming process of legally establishing the validity of a will before a judicial authority.
• Updated beneficiary designation forms—Ensures that your retirement and insurance beneficiary elections reflect your current wishes, because beneficiary designations often supersede provisions in your will.
• Transfer-on-death registrations—Allows mutual fund and brokerage accounts to pass to your beneficiaries upon your death without the time and expense of probate.
• Life insurance policy for final expenses—Ensures that your estate has the ability to meet the immediate cash requirements that will arise at your death. 

How do I set up a will?

Step 1: Research legal services and consider those offered through HPE, then pick the option that is right for you.

Having a current will is a critical first step in the estate planning process. It establishes your wishes and provides direction on how they should be executed after your death. More than any other tool, a will spares your loved ones unnecessary work and expense. Yet, many Americans die without a will, which is known as “intestate.” This situation can cause a great deal of burden on your survivors.

Your will should:

• State how you wish your property and assets to be distributed at your death, if the property does not pass outside your will (for example, through an insurance policy, employer retirement plan, or IRA beneficiary designation),
• Name an executor (also called an executrix or personal representative) for your estate, and
• Provide for the payment of costs incurred in settling your estate.

If you have minor children, your will should also:

• Designate a guardian for them, and
• Name a trustee to protect your children's inheritances.

Life insurance—how much is enough?

An integral part of your estate plan, life insurance is designed to replace lost income and pay for the needs of your family in case of your death. When deciding how much you should have, think about how much your family would need to maintain payments on your mortgage, pay for college tuition for your kids, and have a cushion for major expenses that might come up.

Your age and life stage play a big part in determining how much is enough. For example, if you’re young and single with no dependents, you probably don’t need much in the way of life insurance. However, if you’ve got a spouse, children and/or aging parents counting on you financially, your life insurance needs will be much higher. Then once your kids set out on their own or you’re getting ready to retire, you may not need as much coverage. It’s always a good idea to take a look at your current situation every few years to see if you—and in turn, your loved ones—are covered for the right amount.

So how much life insurance do you need? While there are various life insurance calculators available on the Internet that can help you find out, you may also want to take the time to visit with an insurance agent who can review your personal financial goals and answer all your questions. Be sure to revisit your policy or any supplemental coverage offered through Hewlett Packard Enterprise every couple of years to make sure you’re adequately covered.

Where do I start?

Estate planning doesn’t have to be overwhelming — you can do it in steps. Start by finding an experienced attorney who specializes in wills, trusts, and estates to set up the legal documents you need to ensure that your wishes are properly recorded and compliant with current laws. But you should also discuss your financial plans and life insurance needs with a qualified tax and financial advisor.

By spending time now and involving qualified professionals, you’ll be in a better position to leave your loved ones the means to move on with their lives financially should something happen to you.

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