Estate Planning: Securing Your Assets and Family’s Peace of Mind
From making reservations at our favorite restaurants to saving for retirement, we all plan for the future. Planning allows us to think through situations and anticipate what we will need – whether it’s ensuring our favorite restaurant has a table for a birthday dinner or having enough money to retire without worry. Plans work similarly for life’s inevitable moments, such as illness, injuries and death.
What is Estate Planning?
Estate planning, the process of designating who will receive your assets in the event of your death or incapacitation, can save your family the emotional and financial headache of deciding what to do with your possessions when you can no longer.
Despite its benefits, estate planning is often overlooked. According to Caring.com’s 2023 Wills and Estate Planning Study, 64% of Americans think having a will is important, yet only 34% of Americans have an estate plan. A common misconception is that estate planning is only for the wealthy. But anyone can — and should — create an estate plan, no matter the estate size.
Estate planning can be the difference between a smooth transition and a rough one during an already challenging time. Having an estate plan can prevent unnecessary strain on your loved ones.
Let’s break down the importance of estate planning, what you’ll need and how to get started.
Why is Estate Planning Important?
Throughout our lives, we accumulate many things: money, vehicles, real estate, etc. These items make up our assets. Having an estate plan gives you control over how your assets are distributed. Without one, your assets’ fate can land in the hands of the court, which may or may not align with your wishes.
Once the courts are involved, it can be an uphill battle for your loved ones, both with the law and each other. Estate planning allows you to avoid potential conflicts, give clear instructions for your assets, and maximize the benefits for your beneficiaries.
An estate plan also lets you manage your medical care should you become incapacitated. You can outline specific directions detailing the treatment you want to receive. For instance, if you want to be put on life support or enact do-not-resuscitate orders, you can write that into your estate plan.
Another reason an estate plan is important is that you can designate an executor, beneficiaries, and guardianship. Your assets are sensitive items that a trusted party should handle. We all want to ensure the right people inherit our belongings and any dependents are in the care of a stable and reliable guardian. An estate plan lets you choose whom you want to act on your behalf, whom your assets go to, and who should be responsible for your dependents.
What Do You Need for Estate Planning?
An estate plan can vary from person to person, but the most common legal documents include a Living Will, last will and testament, end-of-life plan, financial power of attorney, medical power of attorney, and trust.
A Living Will: Also known as an advance healthcare directive, it specifies the medical treatments and services you want to receive if you can’t communicate.
Last will and testament: Explains how you want your estate to be distributed after your death, which your executor (the person legally obligated to manage your affairs and wishes) will carry out.
End-of-life plan: Details the funeral and burial arrangements you prefer.
Financial power of attorney: Appoints an individual to act on your behalf regarding finances.
Medical power of attorney: Appoints an individual to act on your behalf regarding medical decisions/care.
Trust: Holds assets on behalf of your beneficiaries, which they will eventually inherit; can be revocable (able to be changed) or irrevocable (unable to be changed).
Note that wills and trusts are not the same as estate planning but are of the many documents that are part of an estate plan. Having those documents doesn’t mean you have an estate plan.
Store all of these documents in a secure and accessible place for the appropriate parties to find. Consider encrypted digital storage or investing in a fireproof safe. Be sure to also keep a physical or digital copy of your documents in case the originals become lost or destroyed.
How Can You Get Started with an Estate Plan?
Getting started with an estate plan doesn’t have to be an arduous undertaking. There are numerous online platforms that are intuitive and easy to use to get you started.
Another option is to see an estate planning attorney. They can help you navigate the ins and outs of end-of-life legal documents, offer you the most relevant legal advice for your situation, and customize a plan that’s right for you.
Estate planning doesn’t necessarily require an attorney, but it may be beneficial in certain situations to hire one, such as if you have out-of-state property or assets, want to protect your assets from Medicaid, or need to set up an irrevocable trust.
Whether you decide to go it alone or hire outside help, you’ll need to gather important documents to begin drafting your estate plan. These can include:
- Bank account statements
- Credit card statements
- Mortgage documents
- Beneficiary designations
- Guardianship designations
- Business ownership documentation
- Investments and brokerage account statements
- Life insurance policies
- Vehicle titles
- Intellectual property, trademark, copyright, and patent documents
- Pensions and retirement account documentation
- Loan documents
Estate planning is critical in managing your affairs and securing your assets. By planning ahead, you can ensure that your assets are distributed according to your wishes, minimize potential conflicts, and provide financial security to your loved ones.
US Legal Forms, a part of the larger airSlate comprehensive document workflow automation platform, has over 85,000 templates to help users draft legal documents, such as an estate plan. Take advantage of the beneficiary planner, contract management, spreadsheets, and client questionnaires to handle your estate planning efficiently.