It’s 2020 and, in the past few years, you have been firmly #adulting. You have a career, maybe you got engaged, married, maybe bought a house or moved in with your partner, maybe had a kid, maybe a friend or family member died, etc…
Humans don’t like to plan for bad outcomes, even when they are inevitable. Taking the first step is often the most difficult when it comes to crafting your estate plan because let’s be honest, you aren’t dying anytime soon, and it is a waste of your time, right? It helps to periodically designate a time and a place to sit down and focus on your plan. Otherwise, you risk just putting it off. Not all estate documents require you to be dead to be useful!
Significant life events usually help us think about our future and responsibilities. Loss of loved ones, marriage, having kids, purchasing a home are among them. These are actually opportunities to begin the process. And, if you already have estate plan documents in place, be sure to review and update them following significant life circumstance changes.
So you have decided to establish your estate plan – what is the procedure like and how long does it take for it to be a legally binding document? It can be a quick process, believe it or not. Many individuals do not have a complicated estate, so the plan can be created in a matter of hours if you have the proper paperwork. While drafting the documents can be rather streamlined, we absolutely encourage you to sit down with us at TFC to ensure the plan is integrated with your overall financial picture.
The primary legal documents that comprise an estate plan are the Last Will & Testament, Power of Attorney, Living Will, Health Care Proxy, and perhaps a Trust document. Ultimately, a proper estate plan will allow for an efficient transfer of assets & control from you to your heirs upon your passing. Minimizing taxes is also critical, so it is an important conversation to have with us at TFC.
This is what we do at TFC. We will request you provide personal documents, then we will provide the estate planning materials. Once we come together, we will then craft the aforementioned documents. But the process does not end with your signature.
Your estate plan may include gifting assets during your lifetime. There are important tax-avoidance strategies we will discuss with you when we establish your estate plan. If you own a business, there are key steps we can take to ensure the transfer is crafted to your wishes with minimal tax implications.
Another often overlooked area of the estate plan regards taking care of loved ones. Perhaps you become the primary caregiver for your aging parents. You must be sure someone else is willing & able to step into that role should you pass. Other areas to be included in your plan are how to avoid probate and what happens in the event you become incapacitated.
It helps to communicate your plan with your loved ones. Many wealth & control transfers within families are not successful because of tensions caused by a lack of communication. You certainly do not have to disclose every detail with every person in your family, but you don’t want to surprise or upset anyone about their inheritance if at all possible. At the very least, share with your loved ones what your overall values and priorities are – this can help make the final steps in the execution phase go as smoothly as possible.
Here’s the point
- Establishing your estate plan can be done in a matter of hours in our office, but the process does not start nor end there
- You must think about your priorities & values, then we can help you put that on paper within the proper legal documents
- After we have the plan created, you must be intentional to communicate your wishes to your family members and be sure to update the estate plan when significant life changes occur
- There is significant effort involved, but the better the plan is, the smoother and less costly it will be to transfer your assets/control the way you want.
Action items
- Write down your wishes. This does not have to be a legal document; rather it is an exercise to get you thinking about how best to transfer your assets – of course, nobody knows that better than you.
- Once you have your thoughts prepared, sit down with TFC so we can work with your attorney to do the heavy-lifting of creating the legal documents based upon what you want
- Have a serious talk with your loved ones about your wishes. It is the responsible thing to do. It will also encourage others to take similar steps.
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This was Blog Post #2 in our Estate Planning Series. Make sure you circle back to check out Blog Post #1: What is Estate Planning? if you have not had the chance to read it yet.
Featured Image: Photo by Stephen Leonardi on Unsplash