Estate planning – not just for the wealthy

Do you have an estate? Many people think they don’t but if you have assets, then you have an estate. It’s made up of everything you own including your home, your life insurance policies, your investments and even the brooch that was passed down to you from great Aunt Ethel.

It’s only natural that you would want to have some control over how these things are distributed when you die and that’s where estate planning comes in. Estate planning involves creating a plan and a set of instructions that state what you own, who you would like to receive it and when they should get it. And of course, you want to do all of this without incurring excessive taxes and legal costs. Here are some tips on how to get started:

Review your assets – Take an inventory of everything you own including real estate, cars, boats, recreational vehicles, life insurance policies, investments, retirement savings and anything else that you or your family would consider precious or sentimental (e.g. your baseball card collection, heirloom jewelry or unique pieces of furniture). Start to think about how you want to distribute these items in a way that will avoid a family feud, or at least reduce the chances of one.

Update key documents – A proper estate plan includes several important documents that outline your wishes regarding the distribution of your assets. When you die, your estate goes through a probate period during which the government will inform beneficiaries of your death, pay outstanding debts and taxes, catalog your assets and distribute inheritances and gifts.  Things to consider include:

• Preparation of a valid will that names an executor, beneficiaries and guardian for minor children
• Updating the beneficiaries on any insurance policies or investments
• Pre-planning funeral arrangements
• Creating a “just-in-case” folder or virtual shoebox listing all of your personal and financial details

The role of life insurance – Already an integral part of your overall financial plan, life insurance can play a significant role in your estate plan. Generally, life insurance proceeds payable to a named beneficiary pass to that beneficiary free of income tax¹. Also, if you don’t feel that your beneficiary can manage a large lump sum, you can arrange for the death benefit to go to a trust, which can distribute smaller monthly payments to the beneficiary. Advantage Plus² from Foresters Financial™ is a participating whole life insurance product that offers a variety of features, including built-in guarantees and the flexibility to grow with you as your personal and family needs change. Your financial representative can provide full information on Advantage Plus and help you design your coverage to meet your estate planning needs.

And Foresters members can access Legal Link, a unique member benefit³ that enables members to talk to a local lawyer about estate planning and other legal questions.

¹ Proceeds from an insurance certificate paid due to the death of the insured person are generally excludable from the beneficiary’s gross income for income tax purposes. Consult your tax advisor for complete information on your specific situation. Foresters, their representatives and employees, do not give legal or tax advice. The information given here is merely a summary of our understanding of current laws and regulations. Prospective purchasers should consult their tax or legal advisor.

² Underwritten by The Independent Order of Foresters

³ Foresters Financial™ member benefits are non-contractual, subject to benefit specific eligibility requirements, definitions and limitations and may be changed or cancelled without notice.