Estate planning is most people’s least favorite financial topic, so why would I consider it the equivalent of a sprint distance triathlon? That’s because this is the only area of financial planning that applies to everyone. That’s right, estate planning is for everyone–not just the rich and famous.
If you don’t have an estate plan in place – make sure that you listen in and do the homework! This episode will teach you exactly how important it is to have an estate plan.
You will want to hear this episode if you are interested in…
- Why everyone should have an estate plan [2:02]
- What an estate plan is [6:00]
- What an executor is and why you need one [8:02]
- Your homework [9:12]
The essential elements of estate planning
Estate planning is designed to handle two main areas: what happens if you become incapacitated and can’t make a decision on your own and what happens if you pass away?
If you don’t have an estate plan in place that means that your doctors, next of kin, or the state will make your final decisions.
An advanced healthcare directive and a power of attorney can dictate whether you would like to have all life-saving measures performed or whether you would prefer to have a do not resuscitate order (DNR) in place.
The most basic legal document in the event of death is a last will and testament. This is the document that states what happens to your belongings and appoints a guardian for your minor children.
Why having something in place is better than nothing
While many people rely on an estate attorney to help them prepare their estate plan, it isn’t completely necessary. Having something in place is better than nothing.
If you don’t have your wishes written out, the state could be the one to determine what happens to your estate and your minor children. Since this is probably the last entity that you want to decide the fate of your belongings and children, it is crucial that you draw up some paperwork as soon as possible.
Basic last will and testament templates can be found online or you could even get started by writing something out by hand. The most important thing is getting it done as soon as you can.
Review your estate plan and beneficiary designations periodically
If you do have a will in place, fantastic! It is something that you need to review periodically. You’ll also need to review your beneficiary designations periodically as well. Many people don’t realize this, but beneficiary designations actually outweigh a will. So, check that the beneficiaries for your life insurance and retirement accounts are up to date and reflect your wishes.
The key to estate planning is getting started. If you don’t have an estate plan in place, your homework is to write out a basic will right now. Yes, that’s right, do it now! You never know what tomorrow will bring, so get started now! Listen in to hear how to increase your financial fitness while increasing your physical fitness. I’d love to hear from you, so email me at Justin (at) wallerfc (dot) com.