How Couples Can Approach Estate Planning

Estate planning is a critical aspect of financial management that couples should carefully consider, as they plan for the rest of their life together. It involves making important decisions about the distribution of assets, properties, and investments after one’s demise. Collaborating on estate planning not only safeguards the financial well-being of the surviving partner but also ensures a seamless transfer of wealth to your beneficiaries. Let me outline some essential steps that you and your other half can take, to navigate estate planning effectively and secure your legacy of love.

Open Communication:

The foundation of successful estate planning begins with open and candid two-way communication. Engage in conversations about your financial goals, aspirations, and concerns. This will help you both in understanding each other’s wishes and developing a comprehensive estate plan that reflects your shared values. Conversations should encompass discussions on beneficiaries, distribution of assets, and any charitable contributions you might wish to make.

Wills and Lasting Power of Attorney (LPA):

A will is a legal document that outlines how a person’s assets should be distributed upon their demise. For couples, drafting individual wills is crucial to ensure that their wishes are respected.

Furthermore, couples should consider establishing Lasting Power of Attorney (LPA) documents. An LPA allows an individual that you trust to make decisions on your behalf should you one day become mentally incapacitated. This document safeguards the financial and medical interests of your surviving spouse and ensures that their preferences are upheld even during challenging times.

Asset Inventory and Beneficiary Designations:

To navigate estate planning effectively, couples should compile a comprehensive inventory of their assets, including bank accounts, real estate, investments, and insurance policies. This inventory aids in evaluating your net worth and planning for equitable distribution. Additionally, you should review and update your designated beneficiaries on accounts and insurance policies to ensure that your intended beneficiaries receive their rightful share.

Trusts and Estate Taxes:

Married couples with substantial assets might consider setting up trusts as part of their estate planning strategy. Trusts provide a mechanism to manage and distribute assets efficiently, potentially reducing estate taxes. They can also be instrumental in safeguarding assets for specific purposes, such as funding education or providing for minor children. But do be aware that estate taxes can impact the amount passed on to beneficiaries.

Professional Consultation:

Seeking guidance from experienced professionals is indispensable in crafting a sound estate plan. Estate planning experts can provide insights and expertise to ensure that the estate plan is legally binding and aligned with your objectives.

Disclaimer:‍‍‍‍‍‍ Investment carries certain risks. You should not just rely on results as an indication of your financial needs. You should understand and familiarise yourself with any investment and the associated risks before investing. You are also recommended to seek professional advice before making any decision to buy, sell or hold any investment or insurance product. The views and thoughts expressed in the post belong solely to us, and not to Manulife Financial Advisers Pte Ltd, or any other group of individuals.