It’s easy to think that because you don’t have children, you really don’t need to bother with an Estate Plan. We beg to differ. Hear us out…
Having a comprehensive, conclusive Estate Plan in place is one of the single most important things you can do in your adult life. Your plan is a gift to those you leave behind, even if those people aren’t your kids.
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Why Everyone Needs an Estate Plan
Estate Plans aren’t just for the wealthy, or just for those who’ll leave behind a big, impressive legacy, or even just for those who have children. The truth is, we should all have our affairs in order so that one day, when the time comes, our families won’t be left cleaning up our estate and wondering what we would want.
Your Estate Plan includes so much more than just leaving money to your children. It’s an opportunity for you to make your wishes known and your intentions clear, about everything, including:
What type of medical care you’d want in the future
What your final wishes are/what type of memorial or funeral you’d want
Where your belongings should go
Who should get any portion of your financial assets and property
But there’s even more…
Yes, it’s true that Estate Plans are for the future. But there’s a big misconception out there that they only come into play after you pass away. In reality, your plan is a vehicle designed to protect you and your loved ones starting the moment you execute it. Depending on your level of need and your current (and expected future) estate value, you can design an Estate Plan that puts things into motion as soon as tomorrow.
What to Include in an Estate Plan
Contrary to popular belief, an Estate Plan is much more than just your Will. It’s even more than a Will and a Trust. A complete Estate Plan can be made up of a number of different documents and tools, all specifically designed to make your wishes known and protect your intentions for the future.
Your Estate Plan may include:
A Living Will
A Living Will is an important Estate Planning document. It details your specific preferences about potential medical treatment(s) you would (or perhaps more importantly, would not) want. Your Living Will becomes effective if you ever become incapacitated and are unable to express your wishes.
Your Last Will and Testament
Also simply called a Will, your Last Will and Testament is a legal document you create to clearly and explicitly explain how and where you want any property you own to be distributed after you pass away. You also use your Will to designate an Executor, who’ll be charged with managing your estate in the distribution of your assets after your passing.
A Trust is a legal document that creates a three-party fiduciary relationship between a Grantor (the Trust creator), a Trustee (the person appointed to manage the Trust’s assets), and a beneficiary (the person, persons or organization(s) who’ll ultimately benefit from the Trust’s assets). There are multiple types of Trusts to choose from, depending on your specific needs
A Durable Power of Attorney (POA)
A Durable Power of Attorney (POA) is a document that gives another person power or legal authority to make decisions on your behalf. The “durable” part is key in that it means that the authority will not cease should you ever become incapacitated. Normal POAs would terminate at that point. Durable POAs are typically used for financial purposes.
A Medical or Healthcare Power or Attorney (POA)
A Medical Power of Attorney authorizes an agent (person you appoint) to legally make healthcare-related decisions for you.
Your Designated Executor
An Executor is a person or organization you appoint to dutifully carry out any instructions you leave in your Will.
A Named Trustee
A Trustee is a person or firm you name in your Trust to manage and administer property and assets held in the Trust. They typically have a fiduciary responsibility which legally requires them to make decisions and act in the best interest of your beneficiaries.
Guardians for Your Children (or Pets!)
A guardian is a person you legally appoint via guardianship to give the legal authority to make decisions and care for your dependent(s). This could be your children, your pets or even an adult dependent who cannot care for him or herself.
You can use your Estate Plan to identify charitable organizations you want to leave assets to. There are various vehicles and tools you can use to accomplish this, including specific Trust types and even direct beneficiary designations on certain assets, policies and accounts.
Naming beneficiaries officially and legally is the only way you can be completely confident that the person or people you want to receive your assets will actually benefit from them.
What Happens If I Don’t Have an Estate Plan
If you pass away without an Estate Plan, it’s called dying Intestate. When this happens, your entire estate, all your assets, any property, every bank account and policy, retirement funds...everything you have ever owned, goes into a lengthy, costly, typically pretty stressful court process known as probate.
During the probate process, without any guidance by you via a valid Estate Plan, state law will dictate where everything goes and who gets what. Keep in mind, this may not be in line with what you would have wanted. Unfortunately, at that point, you have no say.
Creating a solid Estate Plan is the only way you can protect your loved ones and your legacy. Even if you don’t have children, there are people in your life who you would want to benefit from your estate. More importantly, there are people who you would not want to saddle with the burden of having to deal with your estate with no guidance, causing them stress and even more heartache than just grieving your loss.
Trust & Will is here to help you create all of the Estate Plans you need. Our simplified, efficient and cost-effective Estate Planning tools can make sure your affairs are in order and your future is well-planned for, even if you don’t have children.
Want to read more from our “Myth Buster” series? Click the links below to follow along as we break down these other common estate planning myths:
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