Life is filled with so many moments, big and small, that chart the paths we take. Each of these moments is strung together to help create the larger picture of our lives, the memory, the legacy.
Legacy is an important topic to think about, no matter what season of life you find yourself in. Whether you are newly married, welcomed your first child into the world, or fresh in retirement, your legacy helps shape your perception and vision for your life. One way you can help establish your legacy is with a solid estate plan.
Estate planning is the process of cataloging, organizing, and preparing your assets. It is an important piece of your financial strategy, in that it gives your family and loved ones a plan when you have passed away.
So many people view estate planning in a negative light, but we want to show you that with a thoughtful and carefully designed estate plan, you will create more opportunities for moments to shape not only your life now but also the legacy you leave behind.
Create A Will
A will is one of the least understood and most important documents in your estate plan. When people think of a will, their minds often turn to a desolate family reunion with arguing siblings and dramatic revelations. But a will often doesn’t carry such negativity. In fact, many people now either forget to make a will or think that they don’t have enough assets to warrant creating a will.
But every person needs a will. It is a living document for your wishes and creates a clear division of your assets. Your will allows you to legally bind your wishes to be carried out in the way you have arranged.
It is important to think through this process and talk with your family and loved ones so they know what is coming and what to expect. Keeping your loved ones (spouse, kids, etc.) involved in the process with you will help you outline what you want for your legacy. Keep in mind though, that this process is about you and your choices should reflect the best decision for you.
Establish Your Beneficiaries
Beneficiaries are people who you grant access to your accounts in the case that you are unable to manage them yourself. Your beneficiaries are important as they will not only have the responsibility of gaining the assets but also paying any remaining taxes or fees attached to the assets as well.
You will need to select beneficiaries for more items in your financial plan than you may realize.
Here are a few to get you started:
- Social Security
- Health Insurance
- Life Insurance
- Checking Account
- Savings Account
- Real Estate
Each of the accounts or investments in your name need to have a beneficiary attached to them, which is why it is important that you ensure these names are updated. You don’t have to check all the time, but in the event of a major life change like a divorce, new child, remarriage, etc making sure you have the right name can really help you in the long run.
Know Your Power of Attorney
A power of attorney is someone who you elect to make decisions on your behalf should you be unable to. This is a crucial role and should be someone who both shares your view on tough situations and will carry out your wishes to the best of their ability. Sometimes that person is a spouse, other times it is a child; take a look at your situation to figure out the right people for you.
There are two main spheres a power of attorney is appointed for:
A financial power of attorney is someone who will handle all of your financial needs from taxes to paying any debts, to legal fees, to managing the estate.
A medical power of attorney is someone who will make medical-related decisions for you should you be unable to such as surgeries, life support, etc.
While you can have the same person perform both roles, you might consider selecting two people who work well together to avoid overwhelming your loved ones.
Consider A Trust
A trust allows you to appoint a third-party person (a trustee) to grant assets to a beneficiary. Trusts are a good way to help preserve your assets while giving you control over when your wealth will be passed down to future generations.
A trust can be a good addition to your estate plan in that most trusts do not have to go through probate, a legal system for estate planning, and could save your beneficiaries money by not having to pay estate taxes. Each situation is different, so be sure you talk with your financial advisor to figure out the most appropriate move for you.
Call In A Professional
Each estate plan is unique. It should align with your goals, values, and vision for your legacy. Our clients appreciate our gentle touch, professional advice, and our investment in your success. An estate plan is a wonderful tool to put you on the path for financial health now and a memorable legacy later.
Are you ready to start your estate plan? Schedule a call with us, we can’t wait to hear from you!