Eight Estate Planning Essentials
Estate planning is more than just creating a will. As a Financial Planner I have the unique responsibility of preparing my clients for events that cannot be predicted, but it is my job to make sure they are anticipated. One of the greatest tools in my toolbox is Estate Planning, a tool that allows me to not only look after the best interests of my clients in the present, but the futures of my their loved ones as well. Let’s look at eight documents you may need to prepare for yourself and your family.
1. Last Will and Testament
A legal document used to distribute property to heirs, specify last wishes, name guardians for minors and identify who is responsible for managing the estate and implementing your wishes. Every adult needs one. If you don’t specify who’ll take care of your kids and who gets your stuff, the state will.
2. Durable Financial Powers of Attorney
A durable power of attorney gives someone you trust authority to handle your financial and legal decisions if you’re unable to do so yourself. Of course, the person selected needs to be someone who will represent your best interests.
3. Durable Medical Power of Attorney
You assign a healthcare proxy or durable power of attorney to make medical decisions for you when you are not capable to do so for some reason. That person will need relevant health information so be sure to include a HIPAA provision that gives your physicians permission to disclose your medical information.
4. Living Will and Medical directives
An estimated 70% of Americans have no written directives outlining how they’d like to be treated should they need life-sustaining medical treatment. A living will lets you specify what types of medical treatment you want to sustain your life, if you’re terminally ill or are in a vegetative state. Medical directives apply in the event you become incapacitated and are unable to communicate your wishes for treatment.
5. Revocable or Living Trust
In many states, a living trust can be used to distribute property a little more privately than a will. It also can help avoid a costly and stressful probate court process and may offer substantial tax benefits. Living trusts also can be used to transfer assets in an orderly, and private, manner. You can even stipulate provisions for the bequests, if you wish.
6. Beneficiary Forms
For insurance policies, retirement accounts and some other assets, the beneficiary form prevails over the will. So whomever you’ve named will receive those assets unless you update the form. It’s a good idea to keep current copies, as well.
7. Letters of Instruction
A way to share any wishes not covered by a will (e.g., who’ll take care of your minor children or whether you want to donate your organs).
8. List of Contacts
A detailed list of people to contact in certain circumstances, including family, friends and the professionals who oversee your legal, financial, insurance and health matters.
Estate planning can be daunting, but with the right person in your corner there is no need to feel anxious. If you have any questions or would like to setup a time where we can meet in person to discuss your Estate plan, please call our office at (253)627-6010 and we would be excited to schedule a time to sit down and discuss.
Ali Criss, CFP® Managing Partner & Chief Compliance Officer