Tuesday, July 30, 2013


Dear Readers,

As humans, we understandably tend to avoid facing our inevitable mortality, but creating a basic estate plan doesn’t have to mean hours of work and expensive attorney fees. The most difficult part is organizing your thoughts to address the distribution of your assets and, if you have children, how you want them to be cared for and by whom.

As we’ve stated in prior posts, you need to have these three basic documents in place regardless of whether or not you are wealthy:

  • a Last Will & Testament;
  • a Durable Financial Power of Attorney; and
  • an Advance Directive for Healthcare with Medical Power of Attorney.

  • If you do not have this documentation in place, do not pass go and do not collect $200. Go directly to an estate attorney and get these items drawn up stat!

    Even for folks who have their estate documentation in place, the topic of beneficiary designation is often overlooked or misunderstood. It is imperative to check that you’ve properly designated your beneficiaries on your IRAs, 401(k)s and life insurance policies. That’s because these assets pass directly to your named beneficiaries and are not subject to probate (i.e., they are not distributed through your will). Even if your will provides for other beneficiaries, the beneficiaries you designate on your life insurance policies, IRAs and 401(k)s are binding and they are the only beneficiaries who will receive those particular assets.

    Moreover, after life-changing events like the birth of a child, death of a spouse, divorce or remarriage, it’s especially important to review your beneficiary designations. You should also name a contingent beneficiary should your primary beneficiary predecease you or die at the same time as you. Furthermore, your designations should be reviewed from time to time and shared with those assisting you with your estate planning to ensure it aligns with your active estate documents.

    Finally, make sure you keep your estate documentation in a safe, accessible place in your home (not just a safe deposit box, because it can sometimes take a court order for someone else to access its contents). Be sure to include a schedule of your various accounts and policies with beneficiary designations along with your advisors’ contact information. It’s also wise for your advisors to maintain copies of your estate documentation and assets schedule.

    Putting off getting your estate documentation in place and failing to periodically review your beneficiary designations can have terrible consequences for your loved ones. Please let us know if we can help you get your financial house in order, and as always, we hope you will keep Rollins Financial in mind when seeking professional advice on financial planning and investing.

    Best regards,
    Eddie Wilcox, CFA

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