WSJ Your Money Briefing - What You Can Do Now to Simplify Your Estate Plan for Your Heirs

Episode Date: November 29, 2024

To save time, money, and family squabbles after you die, it helps to have an updated and detailed estate plan. Wall Street Journal contributor Cheryl Winokur Munk joins host Ariana Aspuru to discuss how to make your estate simpler for your heirs.  Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

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This is not a recommendation or offer to buy, sell, or retain any specific investment or service. Here's your money briefing for Friday, November 29th. I'm Arianna Aspuru for The Wall Street Journal, filling in for J.R. Whelan. It's not an easy, breezy conversation, but a detailed estate plan can make life after you're gone way easier for your loved ones. It's just, it's such a shame when families are divided over stuff.

And it just, it doesn't have to happen that way. A little planning can really go a long way in making sure that your heirs are provided for and that there's no family acrimony. We'll talk to Wall Street Journal contributor, Cheryl Winokermunk, about it after the break. The Goldman Sachs Podcast featuring exchanges on rates, inflation, and U.S. recession risk. Exchanges on the market impact of AI. For the sharpest analysis on forces driving the markets and the economy, exchanges on the market impact of AI. For the sharpest analysis on forces driving the markets and the economy, count on exchanges between the leading minds at Goldman Sachs.

New episodes every week. Listen now. If you don't want your assets to end up in the wrong hands, there are some steps you can take now to make your estate simpler for your heirs. Wall Street Journal contributor Cheryl Winokermunk joins me. Cheryl, why is estate planning important? You work hard to earn money and you gather possessions over your lifetime and you really want your money and your possessions to go to people that you want them

to go to. You don't want, for example, your ex-boyfriend or your ex-girlfriend to be the beneficiary of your life insurance because you forgot to change something when you broke up. The whole idea of planning is exactly that, planning so that you get to be in control to the extent possible. And you've talked to people who've had those mishaps with their estate planning, right? It happens all the time because you just really forget about it. A life insurance policy, for example, is really a kind of a set it and forget it because unless you die, you're not using that life insurance policy.

So even though you may be paying the premiums, many times you just forget who you actually named as beneficiary 10, 15 years before. You really have to make sure as life events change that you're keeping on top of the things that you have named beneficiaries for. And one of the first things you mentioned in your story is keeping documents updated.

What do you mean by that and how often should they be updated? So there's no hard and fast rule, but for sure as life events change, a good rule of thumb is to at least consider what your will looks like every five to ten years or more frequently as life events change. So for example, you could have done a will and within a couple years one of your trustees passed away or you fell out of touch with that person or something, some other thing changed. A child hit the age of majority or for some reason you wanted to change some of the aspects within that. Well, you came into a lot of money. Five to ten

years is a good rule of thumb, but it's not hard and fast. Are there any assets that people commonly overlook when estate planning? One of the things that today is really popular to overlook is digital assets because people don't think of your email account or online photos or your social media accounts as an asset. But in some cases it really can be. If you're a writer, for example, and you keep your notebooks, so to speak, on your computer and then you pass away, if you haven't accounted for that, you could find that those assets get lost or they end

up in hands that you're not happy with. And do you allocate those assets in the same way you would like your IRA or any sort of property? People should account for digital assets in their will or living trust and you should talk to your attorney about how best to do that. The other thing is you want to make sure with the individual digital providers there's ways to set things up so that your heirs can gain access but that can be a provider by provider thing. So just make sure so Google has like an inactive account profile, Facebook has something

else that you can do if you pass away that your heirs can access your account. Don't assume because your heirs have your password they're going to be able to access your accounts. Some of these rules really do vary state by state because the state laws are state specific. So just make sure you check in with an attorney in your home state so that you make sure that you're doing everything on the up and up. Everything will be handled in accordance with your wishes. When assigning assets to different heirs, how much detail should people include? One of the things where people really make mistakes is, let's say they have a major collection.

It can be anything. It can be dolls. It can be baseball cards. And you just assume that your heirs are going to just get along and split it up. But I've just heard so many horror stories of families. One person picks one, one person picks another, one picks another. The problem with that is that in some cases no one ends up happy and it can lead to a lot of family fighting and it can be irrevocable. The best thing to do if possible is to talk to your family in advance about

the assets that you have, those movable assets, those disposable assets. I'm not talking about the money, I'm talking about the things that may be really important. The turkey platter, the picture of grandma, those types of things that sometimes they're not even necessarily monetarily valuable, but they just have a lot of sentimental value. So if you talk to your family about, hey, what do you think about this? What are your feelings on this? And then you divvy up a list, it really makes things much easier after you pass away. Is there such a thing as too much information here? One of the problems I think is that family members sometimes think that they're helping

their heirs by leaving a lot of information. And sometimes it's double information or it's just overkill. Like you don't need to leave pages and pages and keep documents for 10, 20 years depending on the document. Some documents you do have to keep longer than others and that's going to vary on the documents. But basically, if you can throw it out and get rid of it, and it's not necessary to keep, then don't keep it. How much does it typically cost to create an estate plan?

It can be a couple hundred dollars if you have a very simple estate plan and you're doing something online, or it can be thousands of dollars if you have a more complicated plan. So it's really it runs the gamut. It's going to depend on the state. It could depend on the makeup of your estate. There's really no hard or fast rule. But it's something that if you wanted to go ahead and do it, you should know when you're getting into it, you could spend somewhere between a few hundred to a few thousand depending on what you need. And that's correct. I would just want to add that really when you're doing your estate

plan, you want to strive for conflict avoidance because you work your whole life to have a family that stays together and that's happy and it's just it's such a shame when families are divided over stuff and it just it doesn't have to happen that way. A little planning can really go a long way in making sure that your heirs are provided for and that there's no family acrimony. That's WSJ contributor Cheryl Winokermonk. And that's it for your money briefing. What's News in Markets is off this weekend.

But we'll be back on Monday with WSJ's Ashley Ebling to discuss another important part of estate planning, a living will. This episode is hosted and produced by me, Ariana Aspudu. Jessica Fenton and Michael Laval wrote our theme music. Our supervising producer is Melanie Roy. Aisha Amoosam is our development producer. Scott Salloway and Chris Zinsley are our deputy editors.

And Falana Patterson is The Wall Street Journal's head of news audio. Thanks for watching!