You’ve set up your initial Prosperity Plan and are trying it on for size. But there’s one piece of a financial plan in particular that tends to get put on the back burner: the estate plan.
We get it. It certainly isn’t pleasant to think about your own mortality. Plus, chances are you won’t need an estate plan in the immediate future. But accidents do happen and we all get older, so making the time now to prepare for the worst will not only bring you peace of mind, but will also ease the burden on those you love the most.
In this article we’ll answer:
What even is an estate plan?
While the word “estate” often brings sprawling mansions akin to Downton Abbey to mind, estate plans are not reserved for the elite. These legal documents, developed with the help of an estate planning attorney, covers how to divide and share your assets upon death and can outline your preferences for end-of-life scenarios.
Common estate planning elements include:
Last will and testament, including identification of your executor
Powers of attorney: healthcare, durable, general, and financial
Advanced directives and/or living wills
Trusts
Beneficiary designations
Care plans for any children and/or other individuals under the care of the individual (including pets)
These days, many of the documents that make up an estate plan can seem like a commoditized service. So, you may be asking yourself if you even need to find an estate attorney or if you can use an online legal service and save some money.
For many, estate planning is a relatively simple process. If you’re simply looking at a basic wealth transfer, using an online service may be a good fit for you.
But the more complex your assets or life circumstances are, the more likely you’ll benefit from biting the bullet and hiring a professional to build a plan custom tailored for you.
Here are just a few scenarios that may warrant picking up the phone and talking to an estate attorney:
Owning a business
Owning investment properties
Caring for an individual (child or adult) with a disability
Sharing caretaking responsibilities within a complex family structure
Ultimately, whether or not you engage an attorney or turn to some of the online resources that provide templates for developing these documents is up to you. Our general rule of thumb? The more complex your wants and needs, the more likely you need to work with someone one-on-one.
What steps should I expect in the process?
Just as your overall financial plan has an implementation stage, so does your estate plan. Some estate plans will require the creation of additional legal documents or may even result in the restructuring of assets.
Depending on your circumstances, the process of developing an estate plan can reveal additional needs within your broader financial plan. This may include:
Choosing life insurance, disability insurance, or other insurance products
Retitling assets
Following up with your financial advisor to enact certain aspects of your estate plan is an important part of the process.
Pro-tip: Ask your attorney for a summary of actions list. This document outlines all the action steps needed to implement your estate plan. Then, pass it along to Andy and The Prosperity People team so we can make any necessary changes to your accounts.
Just like with a financial plan, if you don’t implement your estate plan, things are unlikely to unfold according to your wishes. You paid money for the plan, so take the steps needed to set it in motion.
And keep in mind that an estate plan is a living, breathing document. It will probably need the occasional update. If someone or something enters or leaves your life, you may want to consider whether or not you need to adjust your estate to account for the change.
How do I communicate my intentions with my loved ones?
To share or not to share? That is the question.
But here’s the thing: There’s no right or wrong answer to this question. It’s about what you want. If you want to share, then do it! If you don’t want to share, then don’t.
That being said, particularly if your estate is complex, having hard conversations and discussing your plans upfront allows everyone to feel as prepared as possible.
When you have these conversations, you increase the likelihood of saving those you love from conflict after you’re gone. By letting the important people in your life know what to expect (and why), you set them up for an easier experience when it’s time to distribute assets. Fostering these conversations helps to ensure that people aren’t pitted against one another over money — an unfortunate side effect that can occur when grief and finances mix.
Pro-tip: Consider an ethical will. This is a heartfelt letter that shares your intentions (before or after your passing) without the legalese.
An estate plan is wholly yours. How you choose to distribute your assets and how you choose to communicate your plans is entirely up to you.
Now’s the time, so stop dawdling!
Whether you’re 40 or 95, now is the time to take action. Creating an estate plan doesn’t have to be doom and gloom — this is about your legacy!
Consider this your friendly reminder to make the time to articulate and formalize your wishes. In doing so, you’re gifting yourself and your loved ones with peace of mind and a legacy that endures.