Hey there, folks! Let's keep the inheritance planning train rolling with five more crucial points to consider. Trust me, you'll want to stick around for these. We're diving deeper into the nitty-gritty, but I promise to keep it just as light and breezy as before. Ready? Let's go!
The Details That Can Make or Break Your Plan
6. Overlooking Beneficiary Designations: You might have the most meticulously crafted will, but if your beneficiary designations on things like life insurance policies and retirement accounts are outdated, it's like having a beautifully decorated cake with a missing layer. Make sure these designations are up-to-date and align with your overall plan. Otherwise, you might end up unintentionally leaving your 401(k) to your high school sweetheart. Oops!
7. Not Planning for Incapacity: We all like to think we'll be sharp as a tack forever, but reality can be a bit more unpredictable. Failing to plan for potential incapacity is like driving without a spare tire—if you get a flat, you're in trouble. Consider setting up a durable power of attorney and a healthcare proxy. These documents ensure that someone you trust can make financial and medical decisions for you if you're unable to do so.
8. Ignoring Digital Assets: In today's digital age, your online presence is a big part of your life. Make sure you include instructions for accessing your online accounts, social media profiles, and digital files. This way, your loved ones can manage or close these accounts without a digital scavenger hunt.
9. Not Considering Long-Term Care: Long-term care can be a significant financial burden. Look into long-term care insurance or other strategies to cover these potential costs. This way, you can protect your assets and ensure you get the care you need without draining your estate. As you may recall from past articles, we can help with Long-Term Care.
10. Failing to Seek Professional Help: Estate planning can be complex. Working with an estate planning attorney and financial advisor can help you create a comprehensive plan that addresses all your needs and goals. They're the experts, and they can help you avoid pitfalls you might not even know exist. Yes, this is what we do. I've been helping clients with this for 38 years and counting.
So, there you have it—five more essential points to keep in mind for your inheritance planning journey. It might not be the most thrilling topic, but getting it right can make a huge difference for you and your loved ones. Now go forth and plan like a pro! And remember, if you need a hand, we're here to help. Check out our white paper, "Before Death Do Us Part," to get started. Happy planning!
By Marc Frye
Marc Frye provides financial analysis and market commentary for the ARA newsletter, translating complex economic trends into actionable insights for retirees.
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Easy Eddie's Take
Marc's right about those beneficiary designations—they're huge! Here's something that catches a lot of people off guard: your 401(k), IRA, and life insurance beneficiary forms override whatever's in your will. So if you got divorced in 2020 but never updated your Fidelity 401(k) beneficiary form, guess who might still be getting that money? The IRS has specific rules about beneficiary designations, and with the SECURE 2.0 Act changes, there are new timelines for inherited retirement accounts that make this even more important to get right.
One question I hear all the time is, "What counts as a digital asset in 2026?" Think beyond just Facebook and Gmail. We're talking about cryptocurrency wallets, digital photo storage, online banking, subscription services, reward points, and even digital books or music libraries. The Digital Assets law varies by state, but having a clear list with passwords stored securely can save your family months of headaches with tech companies.
As for long-term care, here's the current reality: the average cost of a private room in an Arizona nursing home is over $8,000 per month in 2026. Medicare doesn't cover long-term custodial care, and you have to spend down most assets before Medicaid kicks in. A little planning today can protect decades of hard work tomorrow.