You may think only multi-millionaires with yachts and mansions need an estate plan but you’re wrong. Many federal employees acquire valuable assets over a long career: a home, vacation property, vehicles, and investment accounts like the Thrift Savings Plan (TSP) and their spouse’s 401(k). Without a comprehensive estate plan, your survivors may end up in probate court and, worse, left to pay unnecessary taxes.
Only 32% Of Americans Have An Estate Plan – Don’t Be One Of Them
According to a 2024 study conducted by Caring.com, only 32% of Americans have put together an estate plan to protect their assets. Unfortunately – this shows a 6% decline since 2023. Your Last Will & Testament ensures your wishes are fulfilled when you pass away. It enables you to name an executor — also known as an administrator or a personal representative — who oversees the distribution of your assets.
A Good Estate Plan Includes All Of Your Assets
Artwork, collectibles, expensive jewelry, family heirlooms — the list goes on. When you specify who receives each item it eliminates the potential for family arguments. If you have any pets don’t leave them out of your estate plan. Have a discussion with loved ones and friends to see who may be willing to take in your pets when you pass. Then name their new owner in your Will and name a second person if your top choice predeceases you. Otherwise, your pets may end up in a shelter.
“In this scenario, you may also need to have Advance Health Care Directives in place to ensure your preferences for medical care are respected.”
Other Important Documents To Include In Your Estate Plan
If you become incapacitated and unable to make your own decisions, a Durable Power of Attorney designates an agent of your choice to handle your property, finances, investments, bill payment, and signing of documents on your behalf. In this scenario, you may also need to have Advance Health Care Directives in place to ensure your preferences for medical care are respected.
Make Sure You Update Your Beneficiary Designations
Since beneficiary designations always override a Last Will & Testament, it’s crucial to update your beneficiaries on a regular basis. Especially after a significant life event like divorce, remarriage, or when someone you’ve named as a beneficiary passes away before you.
Federal benefits that require a beneficiary designation include – lump sum payments from FERS, the Thrift Savings Plan (TSP), FEGLI, and any unpaid compensation including any unpaid annual leave. Other types of accounts that require a beneficiary designation include credit unions, checking and savings accounts, IRAs, 401(k)s, and private-sector life insurance policies.
To learn more, connect with an FRC® trained advisor who understands your federal benefits.
