What Queen Elizabeth’s Death Can Teach the Rest of Us About Estate Planning

The preparations for Queen Elizabeth’s death reportedly went back decades. That includes careful planning of which assets would be passed to which of her heirs, according to CNN. While the monarch’s resources were rarefied, regular people can take a page from the royal playbook to ensure a smooth transition once they’re gone.

The first step, experts say, is to take estate planning seriously. Less than half of U.S. adults have a will that outlines what they would like to happen with their assets upon their death, according to polling from Gallup that has remained consistent in recent decades. “Not having an estate plan is the biggest mistake,” said Charity Falls, head of wealth planning at Union Bank. 

If you die without a will, your assets will be allocated according to your state’s laws on intestate succession (“intestate” is the legal term for dying without a will). Those rules might not reflect your preferences. 

But the will isn’t the only document you should have in place. Here are some estate planning tips to keep in mind:

Have your documents in order

In addition to a will, adults need a financial power of attorney to name a trusted person to make financial decisions for them if they’re no longer able to, and a health care power of attorney to name someone to make medical decisions on their behalf. (Young adults need a medical power of attorney to allow parents to be involved in their care once they turn 18.) 

The power of attorney documents usually contain language that stipulates when they’ll go into effect. For example, a financial power of attorney might say that the document goes into effect when two independent physicians certify that the subject can’t make financial decisions anymore due to cognitive decline.

Whether or not you need a trust will depend on circumstances such as the state where you live and the amount and type of assets that you have. Every jurisdiction has different rules on probate, the court-supervised process that proves that the will is valid, and that is one factor to consider. An estate planning attorney can help you decide whether a trust makes sense for you.

Keep a copy of your important documents at home and also with your financial advisor and attorney, said Kossandra McDuffie, a certified financial planner and senior associate. In addition, make sure you leave a list of your key contacts for your heirs, including your planner, attorney, mortgage and life insurance brokers, she said. 

Review your plan regularly

Estate planning is not a set-it-and-forget it exercise. Over time, people get married, have children, get divorced and remarried, and all these life circumstances can impact your plan. External factors such as changes to tax law can also affect estate plans, so it’s a good idea to review them every several years or whenever there’s a big life change. “A lot of people will have an estate plan, but it’s from 1985 and it doesn’t reflect their wishes today,” Falls said.

It’s also important to review the beneficiary designations on your retirement accounts, and insurance documents. These particular designations generally override your will. So if you want your second spouse to inherit everything, for example, it’s not enough to say that in your will — you also have to name that person as the beneficiary on these accounts. “You see first spouses get life insurance proceeds all the time,” Falls said.

Communicate your wishes

It’s smart to communicate your plans to your heirs while you’re still alive. “The will speaks for itself, but it’s good to communicate your wishes to hopefully prevent any fighting down the line,” McDuffie said. You don’t need to share exact numbers, but it’s helpful to articulate in broad strokes who is getting what and why — especially if you didn’t divide your assets equally among your children.

Write to Elizabeth O’Brien at elizabeth.obrien@barrons.com