01/11/2021
When you hear the term, “estate plan,” what do you think of? Some think it’s just another word for a Will, while others think an estate plan is something complicated that is only necessary for wealthy individuals and families.
The reality is, we all need one...
Simply put- an estate plan is a set of instructions. Instructions for the management of your estate whether that is necessary during your lifetime in the event you become incapacitated, or during the division of your estate upon your death.
Your home, bank accounts, investments, retirement accounts, motor vehicles, life insurance, furniture, and personal possessions are all part of your estate. Some of us have simple estates, while some of us have larger, more complex estates, but everyone has one. So yes, everyone needs an estate plan.
So what actually goes into an estate plan? There are several documents that can be included in an estate plan. Exactly what your estate plan should include ultimately depends on your goals, values, and family makeup. For a young family or single adult, that may mean a will, term life insurance, and powers of attorney for your assets and health care decisions. For a blended family with children from different marriages and a diverse set of assets, that might require a more dynamic set of documents.
It's also important to note that you’ll likely need to update your estate plan multiple times during your lifetime as your needs and estate change. When your family changes, when you experience a shift in priorities, when your financial circumstance changes, or when you experience any other significant change, your estate plan should change, too. That way you can ensure that your estate plan is tailored to your specific life circumstance.
That is estate planning.
Estate planning is making a plan in advance that will properly effect your wishes upon your death or incapacity. It means naming the person who should receive the things you own after you pass away and it means naming the person or people who should be in charge of managing that.
But good estate planning is much more than just writing down a few names.
It should also:
Include instructions for passing on your values (beliefs, morals, etc.) in addition to your valuables.
Include instructions for your care if you become disabled before you die.
Name a guardian and an inheritance manager for minor children.
Provide for family members with special needs without disrupting government benefits.
Provide for loved ones who might be unable to manage money or who may need future protection from creditors or divorce.
Include life insurance to provide for your family at your death, disability income insurance to replace your income if you cannot work due to illness or injury, and long-term care insurance to help pay for your care in case of an extended illness or injury.
Provide for the transfer of your business at your retirement, disability, or death.
Minimize taxes, court costs, and unnecessary legal fees.
Be an ongoing process, not a one-time event. Your plan should be reviewed and updated as your family and financial situations (and laws) change over your lifetime.
If you have specific questions about your estate plan, or a loved one's probate case, please give us a call so that we may provide answers tailored to your particular situation.
