I find that there is a common misconception that only individuals or families with a high net worth need an estate plan, but that couldn’t be further from the truth. Simply stated, an estate plan is meant to leave instructions for how you want your personal and financial affairs to be handled when you die or in the event that you become incapacitated before death. Creating a plan gives you control over decisions on matters such as how your property will be distributed, memorial services or how your remains should be handled, and setting aside resources for loved ones to ensure they are provided for after your death.
Will: Basic Planning Tool of Estate Plan
The basic instrument that is used to coordinate the implementation of your wishes to dispose of your property at death is a will. I recommend having an estate planning attorney draft your will, although there are other acceptable forms as determined by each state. Attorneys can help with the accuracy of the will and make sure it is properly witnessed and conforms to the laws of the state. Wills do not go into effect until death and can be modified or revoked by its maker at any time.
What Does a Will Accomplish?
- Choice of Executor: A will allows you to select the person who will be in control of your property after your death and see that your wishes are carried out. Without a will, the court will appoint an executor for you.
- Avoids Having State Control the Disposition of Your Assets: If you die without a will, the state will control what happens to your property. Because the state will be in control, most decisions will be based on family relationships.
- Designates a Guardian for Minor Children: An extremely important aspect of a will for parents is the designation of a guardian for their children. You should discuss this decision with your chosen guardians and be sure that they are willing to accept this responsibility.
- May Contain Trust Provisions: Some wills will contain instructions to create trusts upon your death. Such trusts may be useful in creating income streams that will allow the continued financial support for loved ones or even charitable organizations in some cases.
- Transfer of Property: A will allows the transfer of assets such as investments, real estate, business, and personal belongings to specific family, friends or charities.
- Helps Avoid Disputes Among Family Members: Although a will can be contested, having your wishes clearly outlined and stated will help ensure that your true intentions are met.
Once your will is written, it is imperative to review it and your wishes routinely. Births, deaths and other family changes are frequently the reason to make adjustments to your estate plan. In my experience, talking about estate planning can initially be uncomfortable, but the process of creating a plan and knowing that your wishes will be carried out can also provide a sense of relief.
The information contained in this post is not intended as investment, tax or legal advice. StrategicPoint Investment Advisors assumes no responsibility for any action or inaction resulting from the contents herein. Chrissy’s opinions and comments expressed on this site are her own and may not accurately reflect those of the firm. Third party content does not reflect the view of the firm and is not reviewed for completeness or accuracy. It is provided for ease of reference.