When planning for retirement, one crucial element that often gets overlooked is estate planning. Creating an estate plan can ensure that your assets, legacy, and loved ones are protected. While estate planning can seem overwhelming, with so many moving parts, you don’t want to leave anything to chance.

This week on Retire Wiser with NBC Connecticut, Joel Johnson, CFP® breaks down a few key steps to building a solid estate plan.

Designate a Beneficiary

It may seem simple, but beneficiary designations hold significant importance within an estate plan. Imagine a scenario where someone passes away, and they haven’t updated their beneficiary designations. As a result, instead of their assets going to their current spouse, they go to an ex-spouse. Now, imagine how the current spouse might feel.

Make sure your beneficiaries are always up to date, especially when major life events occur such as a marriage or divorce. While this scenario may not apply to everyone, it serves as a strong reminder to review your designations regularly across all your accounts.

Review Your Plan Annually

Ideally, you should review your estate plan once a year. While it might seem excessive at first, it’s important – especially in the beginning stages of planning. Your goals may shift, family dynamics can change, and new assets might come into play. If a divorce has happened or if someone in the family has died – those are the kinds of events where you certainly would want to sit down with your estate planning attorney. Reviewing all your documents annually ensures you’re staying on track with your wishes.

Have a Conversation with Family

Talking about your estate plan with your family is just as important as reviewing it yourself. It’s essential to have those tough conversations, even if some family members might not want to engage. One of the biggest issues we see is that families simply don’t talk enough about money – whether it concerns values, goals, or financial planning.

Money often gets swept under the rug, and children, especially, aren’t taught enough about how someone’s finances can reflect their values. It’s crucial to ensure everyone is on the same page and understands your wishes to not only eliminate confusion but also provide peace of mind.

Get Started on the Right Path

These steps are just the beginning, but they’re vital for setting up a solid foundation for your estate plan. By making sure your beneficiary designations are up to date, reviewing your plan regularly, and having open conversations with your family, you can take the first essential steps toward building a robust plan that aligns with your wishes and values.