Three Answers About Estate Planning


2 min read

1. What is in an Estate Plan?

An estate plan answers the questions:

  1. What happens if you can't take care of yourself or your affairs?

  2. Who will make decisions for you?

  3. Who will inherit your money and property?

  4. How will it be given to them?

  5. What's the best way to achieve this?

  6. How can you limit taxes?

An estate plan might consist of:

  • Will – determines who you are going to gift your property to when you die

  • Revocable Trust – takes property out of your name while you are alive and provides instructions for that property when you die

  • Power of Attorney – allows someone else to make financial decisions while you are alive

  • Advance Healthcare Directive – gives instructions for your healthcare and specifies who can make those decisions

While you have your wits about you, you can create and amend these instructions. It's not uncommon to make changes as your financial situation and relationships change over time.

Do You Need an Estate Plan?

Many people have no estate plan. They haven't left any instructions. They haven't said who will inherit their property. They haven't said who will make financial and healthcare decisions for them if they are incapacitated.

If this sounds like you, rest assured. Someone will get the authority to make decisions for you. Your property will be distributed to your closest relatives. If you don't have anyone, it will go to the state. The law has procedures to make sure everything that needs to get done gets done. It might get complicated. It might not.

But it's not your problem, is it? Why should you care?

Why You Might Want an Estate Plan
  • It ensures your property goes to who you feel deserves it and in the most cost-effective and time-efficient manner.

  • It takes the burden of making decisions off others. It's a stressful time. There's already enough for others to do.

  • There's less likely to be disputes. You manage others’ expectations and there's no ambiguity about intentions.

  • You can avoid or limit taxes. Making a mistake here can have huge financial consequences.