Basic Parts of an Estate Plan

Dec 10 • Estate Planning, Financial Planning, Retirement Planning • 1163 Views • No Comments on Basic Parts of an Estate Plan

No one likes to think about their own demise, but let’s face it – there is a 100% chance that we are going to die at some point.  We all plan for long and healthy lives, but we do not get to choose how much sand is in our proverbial hourglass.   If the odds of dying are 100%, why don’t more people have a plan?  In my experience, they either do not want to think about the prospect of dying or they are generally not educated on what is involved with estate planning, so they tend to procrastinate.  Below are the basic parts of an estate plan and what you need to consider before you meet with an attorney to get your plan in place:

Wills

The main purpose of a will is to distribute property after your death.  If you do not have a will, then disbursements will be decided according to state law – which may not be the ideal situation for your loved ones.  In your will, you will name the person you want to execute your wishes if you are gone (typically, you would name a spouse if you are married, then choose an alternate to fill the role if the first person you choose is unavailable.  If you have children or others who depend on you for care, your will is where you name a guardian for these individuals.  You name a physical guardian (whom the dependents would live with) as well as a financial guardian (who manages the money you leave for your dependents).  The physical and financial guardian can be the same person (or couple), but that is not required.  Often, one may like someone’s parenting style, but not necessarily their money management skills.  You will make your first choice, then also name a successor in case the first choice is unavailable.

Healthcare Power of Attorney 

This is where you nominate who can talk with the doctors on your behalf in the event that you are incapacitated.  You would typically choose one person and nominate a successor if that person was not available.

Living Will/Advanced Medical Directive

This is the “when to pull the plug” document.  You can specify any religious wishes/beliefs for the doctors to follow and decide when you no longer want life-sustaining measures taken if your demise is imminent.

Durable Power of Attorney (Financial)

A Durable Power of Attorney allows you to authorize someone who will act on your behalf for things paying bills, filing your taxes, and supervising your investments if you are unable to do so.  You can make this authorization effective immediately or effective upon a certain event.

It is generally a good idea to notify the people you have nominated to serve in the above roles, so that they aren’t taken by surprise and can ask you questions about your preferences BEFORE something happens to you.  Do your loved ones a favor and put a plan in place to care for them if you are no longer around.

Nothing within this blog is to be construed as the provision of legal advice; it is recommended you consult with an attorney.

For more information, visit our website at www.makinglifecount.com or contact Jamie Bosse at 913-345-1881 or jbosse@makinglifecount.com.

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