James Brown passed away in 2006* with a $90 million estate yet, because it was contested, it wasn’t until 2021 that his final wishes were realized. I don’t want this to happen to you!
This is why, on this episode of Money Mile, we’re diving deeper into estate planning. In episode 22 we covered estate planning at the sprint level and today we’re leveling up to explore this area in further detail at the Olympic level. Learn what you need to know to take your estate plan to the next level–press play now.
You will want to hear this episode if you are interested in…
- Making your estate plan more official [3:42]
- How often to review your estate plan [4:45]
- How to give better direction [5:53]
- Efficiency vs. sufficiency [9:43]
- Your homework [12:24]
Make your estate plan official
While having some estate plan is better than nothing, if you want to level up your financial life you’ll need to train more to be more effective. In this episode, we’ll cover three ways that you can level up: making your estate plan more official, giving better direction, and being efficient rather than sufficient.
Making your estate plan official will help diffuse any confusion once you have passed. This means that you should include witnesses, additional documentation, and rationale, and have your documents notarized.
While you might think that your family won’t be the one to be torn apart upon your passing, it happens more often than you think. This is why it is important to review your estate plan every 3 years or whenever you experience a life-changing event like a birth, death, marriage, or divorce.
Communicate your wishes
To level up your healthcare power of attorney consider an advanced healthcare directive. This is when you appoint someone to make decisions for you and clearly state your wishes on prolonging life and organ donation.
Another way to communicate your wishes is to list anything you own that you would like to leave to specific people, for example, jewelry, a bike, or a car. While there is nothing wrong with having your executor figure it out, if you would like special items to go to specific people this needs to be clearly communicated.
If there are large-scale inequities in your will this should be addressed through a trust. To maintain family unity, communication is a key component of an effective estate plan.
Efficiency vs. sufficiency
A well-designed and maintained estate plan makes sure that your wishes are followed with minimal costs and delays. However, it does not ensure that your estate will have enough resources to address all of your wishes. Having an appropriate savings plan or the appropriate amount of life insurance does.
Your heirs may argue about resources regardless of the amount, but when your resources and your plan are not aligned, it creates a possibility for confusion.
Make sure to listen in to hear what your homework is.
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*James Brown passed away on December 25, 2006, not the 5th as stated in the audio recording.
Resources & People Mentioned
- Episode 22 – Estate Planning – Sprint Distance
- James Brown’s Estate
- California Advanced Healthcare Directive
- How to find an advanced healthcare directive outside California
- Health IQ – Life insurance for triathletes