There is a misconception among many people today that in order to need an estate plan, you must be considered “wealthy” …In truth, having an adequate and detailed estate plan is a necessity for everyone.
There is a misconception among many people today that in order to need an estate plan, you must be considered “wealthy” or have a complex assortment of assets and investments being left behind. In truth, having an adequate and detailed estate plan is a necessity for everyone – including you. Not only does having the proper documentation in place ensure you remain in control of how your possessions are distributed at your death, but it also eliminates feuding and stress among heirs, ensures your wishes for medical care are carried out, and your minor children (if any) are cared for as you desire. While uncomfortable to think about at times, estate planning goes beyond death and helps with risk management issues as well.
When thinking about your need for an estate plan, consider the following:
How do you want your personal assets to be distributed?
Creating a Will allows you to appoint an executor of your estate and provide details on how your assets should be distributed in the event of your death.
Should you ever become incapacitated, who would you want to carry out any financial and business related tasks on your behalf?
A Durable Power of Attorney appoints a representative, such as a spouse, sibling, or adult child to perform certain actions on your behalf such as pay bills and make financial decisions, if unable to perform these tasks yourself.
In case of a medical emergency, who do you want responsible for making decisions on your behalf if unable to make them yourself?
An Advanced Healthcare Directive (or Living Will) documents which types of medical care, including life-sustaining treatments you deem to be appropriate or inappropriate should you become incapacitated. A Medical Power of Attorney designates a representative to carry out those wishes if needed.
If you have young children, who do you want to care for them should something happen to you and your spouse?
Without an appointed guardian, which can be stated in a will or trust, any interested parties ranging from family friends to relatives to social services agencies may apply for guardianship through the courts.
Have there been any recent transitional changes in your life such as marriage, divorce, birth of a child, or sickness?
Once in place, your estate plan (including any beneficiary designations on retirement accounts or life insurance policies) should be reviewed annually to ensure documents and designations remain aligned with your current state of affairs and wishes.
No matter what your estate looks like, at a minimum you should work with a trusted estate planning attorney to ensure you have a will, durable power of attorney, advanced healthcare directive, and durable medical power of attorney in place should you ever be faced with one of the situations listed above.
Keep in mind that creating an estate plan is one of the most lasting gifts you will leave behind. When used properly, not only can it act as a form of insurance and risk management, but it will make it easier for your family to move forward with healing and rebuilding.
by Mary Beth Storjohann, CFP, HoyleCohen