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Answer us this: which person needs estate planning the most?
A) Someone with two kidsB) Someone with a small business of their ownC) Someone who has property and possessions to pass onD) All of the above
If you answered D, ding ding ding! You win.
Say the term “estate planning” and people assume it’s only meant for people with kids, or that it’s used to pass on wealth and possessions. But it’s much more than that, and we know that everyone benefits from an estate plan. We talk about why in our latest podcast episode.WHAT YOU’LL LEARN
- What estate planning usually includes
- Why most people avoid estate planning
- What happens when you don’t have an estate plan
- Basic estate planning documents you need
- A few things you may not have considered for your will
- The future of your business
- Think about life insurance
- Details to remember in your estate plan
Your estate is made up of all your possessions. Your home, your car, bank accounts, investments you’ve made, that yacht you use once in a while, the fabulous jewelry you inherited from your stylish grandmother, your prized collection of Air Jordans in your closet. All of that makes up your estate. So… what happens to it when you’re gone?
An estate plan dictates who gets your property when you pass on. Your kids, your close family members and friends, nonprofit organizations you passionately supported, you get the idea. If you don’t have an estate plan to dictate where your stuff goes, a court usually decides. Can you imagine? As Danielle put it, “You don’t want someone else — a stranger — deciding who gets what.”Other parts of estate planning
Estate planning involves more than your possessions. Your will, which is a basic estate planning document, takes care of those decisions. There are other estate planning documents you need, too.
Your power of attorney is one. A power of attorney is a document that gives another person the legal authority to make decisions on your behalf if you can’t. This person is called your power of attorney agent. A power of attorney agent might make decisions about your medical treatment, finances, assets, and more.
Many people choose their spouse or partner as their power of attorney agent, but consider the worst case scenario: you and your partner both pass away or become incapacitated at the same time. You may want to consider someone else just in case. That brings up another component of estate planning and why we need it: it protects your loved ones. You can appoint a guardian to care for your kids (or fur kids) should that worst case scenario play out.
Plus, you can explain what you want to happen when you pass away. If you want a funeral or memorial service, where it should be held, if you want to be cremated or buried, if you have money set aside to pay for funeral arrangements, etc. These are all important decisions that can be really difficult for your loved ones to make in the wake of your death.
“You don’t want your loved ones panicking, scrambling, stressing, paying… making all of these decisions when they should just be focused on grieving,” Danielle pointed out.
When you make those decisions ahead of time, you’re easing the emotional burden for your family members and friends.Why people avoid estate planning
If we all know why estate planning is good for us, then what’s the deal? Why do we all avoid it? Well, estate planning involves something that most of us are uncomfortable talking about: our deaths. What would happen if we were incapacitated, unable to think clearly, or couldn’t make our own decisions anymore?
It’s obviously not the most fun topic of conversation at parties. After you pluck up the courage to talk about this stuff and get your estate plan in order, though, we promise you’ll feel hugely relieved. Take the first step to feeling better about estate planning and check out our full episode on the topic!
Then, you might want to check out our Wealth by Design DIY program… just FYI 😉
This material is for general information only and is not intended to provide specific advice or recommendations for any individual.RESOURCES & PEOPLE MENTIONED
- Yep, Prince’s estate is still being settled
- Check out estate planning on LegalZoom
- Episode 94: Do You Really Need Insurance?
- Schedule a free call with us — Are we a good fit for your financial planning needs?
- Check out our DIY Financial Planning Course
CONNECT WITH DANIELLE AND DUSTIN