Estate Planning

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Estate planning is not just for well-to-do or older people. We all have an estate – things we own and value like our house, car, furniture, power tools, collectibles and even grandma’s china.  Estate planning ensures that after our deaths, our property and assets pass on to who we want, when we want, and how we want.

But that is only one part of estate planning. Other elements include nominating who will raise any minor children, take care of other dependents and manage our finances and medical care in case of an unexpected accident, illness or disability. Estate planning also helps avoid unnecessary taxes, court costs, legal fees, and emotional trauma for our families and friends.

Do you have a plan for your estate? If you don’t, the state you live in does – and you probably won’t like it. 

Getting started

Everyone’s situation is different, but there are a few basic first steps towards creating an estate plan. These include:

1. Taking inventory of everything you have (from household items to banks accounts) and everything you owe. You’ll probably be surprised at just how much you possess. Having a comprehensive list of assets is also helpful when updating your home insurance or financial plan for your future.
2. Organizing your important documents and either putting them in one place or indicating where they are located. Be sure to give this information to a trusted family member or friend. If you don't have a relative or friend you trust, ask a lawyer to help.

   These documents should include:

   • Inventory of assets and debts
   • Signed will and living will
   • Certificates of birth, marriage, divorce, citizenship, and adoption

• Sources of income and assets (pensions, annuities, IRAs, 401ks, etc.)
• Names of your banks and account numbers (checking, savings, credit union)
• Lawyers and stockbrokers' names and phone numbers
• Insurance information (life, health, long-term care, home, car) with policy numbers and agents' names and phone numbers
• Original deed for your home and car title and registration
• Copy of your most recent income tax return
• Information regarding liabilities and debts, including mortgages and property taxes — what is owed, to whom, and when payments are due
• Credit and debit card names and numbers
  1. Thinking about who will act as the executor of your will – the person who will distribute your property and assets according to your wishes, file for probate  (the legal process whereby the Court validates a will), pay any outstanding debts and generally tie up all loose ends regarding your estate.
  2. Thinking about whom to nominate as your power of attorney in case you are physically or mentally unable to conduct your own financial affairs.
  3. Thinking about whom to nominate as your power of attorney regarding your health or end-of-life care. Give consent in advance for your doctor or lawyer to talk with caregiver(s) as needed.
  4. If you are married and/or have minor children, obtain life insurance.
  5. And most importantly, MAKE A WILL.

Where there’s a will….

Perhaps the most important part of any estate plan involves having a will. If you die without a will (intestate), your state will distribute your money and property according to its probate laws. If both you and your spouse die, the court appoints a guardian for your minor children. In other words, the state's plan may not reflect your actual wishes.

A similar situation occurs if you do have not nominated a power of attorney if you unable to manage your financial affairs or health care. The court will then conduct your financial affairs and oversee your care through a conservatorship or guardianship (depending on the term used in your state). It can become expensive and time consuming, and difficult to end if you recover.

However, according to a 2016 Gallop Poll, only 44 percent of Americans say they have a will. Surprisingly, about three in 10 of those aged 65 years and older, and nearly four in 10 of those with household incomes of $100,000 or more report not having a will.

In addition, two-thirds of Americans don’t have a living will – a document that states your health care wishes if you are unable to do so yourself.  Having a living will can make it easier for family members to make tough healthcare decisions on your behalf and names the person you want to make those decisions for you (power of attorney).

So why is estate planning not a greater priority for more people? Many think they’re not old enough, don’t own enough, don’t have the time or just don’t want to think about it. Those that do think about it feel estate planning is too expensive. It’s not. For young families or single adults that usually includes a will, living will and life insurance. A straightforward will is fairly inexpensive to draft.