To My Surviving Spouse....

To my surviving spouse…. 

If you ever have to read a letter that starts out like that, you better hope somewhere after that, they write something along the lines of “please know that I’ve been very vigilant when it comes to my estate distribution plan and other financial matters…settling my estate will be very easy…”  Sadly that is not often the case.  In fact only 32% of Americans have a will*. 

What happens to the 68% that don’t?  Most often, their assets go through the probate process which can be expensive, cause delays for distributing money to heirs and makes the decedent’s financial matters public information.  And the number one reason they don’t have documents – “I haven’t gotten around to it”.   

Is an estate plan or getting legal documents in place expensive?  The answer is “that depends” but the reality is, some simple yet effective planning strategies can be done for little or no cost!   

One of the most important things is, the assets or accounts simply need to know “where am I supposed to go?”.  Most all retirement accounts (IRA, 401k) have a beneficiary election telling the asset where it’s supposed to go when the owner passes.  More often it’s the non-retirement accounts, think bank, real estate, a business, that don’t know where they are supposed to go.  Simply titling those assets/accounts as “transfer-on-death” could avoid the entire probate process. 

If you really want to make the settlement process easy, don’t scatter your accounts and assets, here, there and everywhere.  You should consolidate like-registered accounts (such as IRAs, 401ks) under one custodian (Schwab, TD).  The same is true when it comes to bank accounts - keep it simple.  The more accounts out there to retitle or rollover, the more aggravation, work, time and expense might be involved. 

Whether you are, or are not, the most financially savvy person in your household, you can and should “get around to” organizing your estate plan.  It can cost next to nothing and potentially saves your surviving spouse a huge amount of frustration, time and money.  Let them be the one that reads the letter that says “…settling my estate will be very easy…”