Estate Planning Strategies
Believe it or not, you have an estate. In fact, nearly everyone does. To name a few examples, your estate includes your car, home, bank accounts, life insurance, and investments—and no matter how large or how modest—it is all part of your estate. But estate planning goes beyond your possessions: it is the steps people take during their lives to strategize and prepare for incapacity, illness, and passing on. Estate planning is ultimately taking care of your loved ones by taking care of yourself.
CREATING AN ESTATE PLAN STRATEGIES
Many people struggle with the idea of where to start, or simply do not think they need to have a plan. The simple fact is that estate planning will be different depending on your lifestage. Here is a rough idea of what you might want to explore based on your lifestage:
- Are you single without any dependents? You may want to explore a durable power of attorney, letter of instruction, and defining beneficiary designations on your accounts.
- Are you married without any dependents? You may want to explore a durable power of attorney, letter of instruction, living will, healthcare power of attorney, and defining beneficiary designations.
- Do you have dependents? You may want to explore a durable power of attorney, letter of instruction, living will, healthcare power of attorney, will, and defining beneficiary designations.
Now that we've talked about what you might want to consider when developing your estate plan, let's summarize what each of those documents does:
- A durable power of attorney: This is a legal document in which you name another person to act on your behalf if you are unable to do so. You can grant limited or broad power to that person. Some examples include being able to pay your bills or make decisions about your investments.
- A letter of instruction: This is a document that can help organize the logistics of your estate plan and give you an opportunity to provide a personalized message to your loved ones. This document could be used by your loved one to understand your wishes and easily access everything you own and owe.
- A living will: This is a document that expresses your intentions regarding life-sustaining measures. It is important to understand that this expresses what you want but does not give anyone the authority to speak for you, which is why it's normally accompanied by a healthcare power of attorney.
- A healthcare power of attorney: This is a document that authorizes someone to make medical decisions for you in the event that you are unable to make them for yourself.
- A will: This is a document that provides instructions for distributing your assets upon your death. There are additional provisions that could be added and details your attorney can work through, but for parents, this is also where they might designate a guardian.
- Beneficiary designations: Beneficiary designations are made on accounts and insurance policies to establish who gets the account when you pass away. You may want to review these and make sure they align with your overall intentions and are updated as your life changes.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.