In Focus – SCCCU Blog

Many still believe that an estate plan is reserved for those with millions and mansions. And this thought could be part of why just 42% of adults in the U.S. have estate planning documents in place, including wills and powers of attorney. But here’s the thing: Anyone who cares about what happens to a) the people they love or b) the stuff they leave behind can likely benefit from setting up an estate plan. Although you might not plan to leave a whopper of an inheritance to your loved ones when you die, an estate plan is still the only way to ensure your assets go to the people or charities you love most. And, often more importantly, the will at that plan’s heart is also the only way to name guardians for minor children.

But what is an estate plan, exactly? It’s a collection of legal documents that dictate who can make decisions on your behalf if you cannot do so and who will inherit your assets after your death. Your estate planning documents should include a will, which dictates guardianship of your children and property; a living will, which tells a hospital about your preferences should you need life support; and powers of attorney. As for the latter, you need two — one for finance and one for healthcare. These grant your chosen person the right to act on your behalf and make financial and health decisions for you. As part of your estate plan, you may also consider creating a revocable (or living) trust to help you avoid probate.

Exactly how you structure your estate plan is up to you, and your attorney; the most important thing is that you have one. Without an estate plan, your heirs can be confused and stressed. With one, you can control what happens to your assets and make life easier for your loved ones. But, it’s one thing to know that estate planning is helpful and another to know where to begin. Here are the steps you need to take to get started.

Work With an Attorney You Trust

To begin the estate planning process, you should work with a trusted attorney who can help you make sense of the necessary estate planning documents. They can assist in listening to your needs and wants and translating them into legal documents that will stand the test of time. If you have a financial advisor, your attorney can coordinate with that person to determine what should be included in your estate plan.

If you don’t know a trusted attorney, look to people you trust and ask who they’ve used. You can also check with the American Academy of Estate Planning Attorneys and the National Association of Estate Planners & Councils to find a trusted professional near you.
If an attorney costs too much, or you’d prefer to go the DIY route, some good estate planning software programs and tools are on the market (specifically Willmaker and LegalZoom.) However, if you can swing it, having an attorney review the forms you create with software is a nice compromise.

Make Your Plan and Include Your Family in the Process

Creating your estate plan means ensuring all your assets have a place to go upon death. To ensure things go smoothly for your heirs, you must set up beneficiary designations on all your financial accounts, including retirement, checking, and savings accounts.

You’ll also want to talk to your loved ones about the goals for the future of your estate. This will help you solidify a plan for your assets and create a foundation of openness that will help your family later if they need to communicate your wishes to others. Instruct them where your estate planning documents are kept, and direct them to any other details they may need after you are gone. Ideally, you’ll also summarize all the most essential information they’ll need (passwords, important individuals like your lawyer and financial advisor, account details, etc.) to make the administration of your assets easier.

Update Your Documents Regularly

If you’re worried about creating an estate plan only to have to change it later, you should know that no estate planning document is ever final. Your circumstances, goals, and means will change as you age. So, you’ll want to revisit your estate planning documents every three years or so to ensure they still reflect your wishes. (Similarly, you often revisit your budget and financial plan to ensure it still works for you!) Maybe you decide to leave more or less to a specific heir or charity, or you want to change guardianship of a child. Your documents can change as often as your goals do. Remember that the purpose of an estate plan is to give you more control over your assets and to give your family peace of mind in the future.