The Estate Plan Stages Everyone Goes Through, for #TodaysModernFamilies


Estate Plan Celebrations

A couple weeks ago was National Estate Planning week. Not exactly a big Hallmark holiday, so you might have missed it. But it got me thinking about the question people ask me the most:

“When should I have an estate plan?” 

My answer:

When you’re ready to make sure you’re not a burden on your family, and you want to choose who makes decisions for you when you can’t make your own.

“Yeah but Tracey…” (I hear you ask)… “I mean how old should I be?

Like the various stages of adulthood itself, there are stages of estate planning. Of course there’s a giant caveat that everyone’s different, everyone’s assets are different, and everyone’s needs are different. So remember – there’s no cookie cutter approach (which is why a private consult is a good idea to make sure you’re doing what’s best for YOU!)

But for the basics: Here are the most common Estate Plan Stages today’s modern families will face.

Someone turns 18

You’ve probably heard me say this a bunch of times: 18th Birthdayas soon as someone turns 18 and reaches legal adulthood, that they get their first Durable Power of Attorney and Health Care Proxy. That’s the first and simplest version of an estate plan. (Maybe Hallmark can work this into their card messaging.)

A Health Care Proxy names the person you want to make medical decisions for you. Think of these as decisions about your physical being, and those decisions only. This person determines your surgeries, Do Not Resuscitate orders, and can even refuse medical treatment. 

A Durable Power of Attorney names someone to make all other personal decisions. These are generally financial in nature (banking, IRAs and such) but it includes so much more. This person becomes responsible for filing your income tax returns, putting in postal forwarding orders, dealing with pets, memberships, and spiritual, recreation and travel needs.

Additional assets and/or a life partner

Estate Plan, Same-sexOnce our young whipper-snapper couples up or accumulates some assets, then it’s time to add a Will to the mix. Your Will tells the Probate Court who inherits your personal belongings after your family deals with the Probate process. 

Probate is the court process that officially passes ownership from someone who has passed away to whomever is supposed to inherit it, when the asset itself doesn’t tell us. For example, life insurance policies usually require you to name a beneficiary. I know, thanks to that beneficiary designation, exactly who is supposed to inherit the life insurance proceeds. 

On the other hand, a bank account titled to a single individual tells me nothing. I have no idea who is supposed to inherit that account when the account owner dies. In that circumstance, I have to bring all similarly-titled stuff to the Probate Court and go through the process of having a new owner declared. A Will merely tells the Court what to do. It does not avoid the Probate process. And a default Will exists in our state laws for everyone who does not have one; the catch is, you might not like it!

So if you care at all about what happens to your financial assets and personal belongings – it’s time to draw up a Will.

A Baby!

A newborn brings on a whole set of concerns for Family, New Babyour new parent(s). And some of those are legal concerns: Who’s going to take care of the baby if something happens to you? Time to update that Will, and add a Nomination of Guardian and a Temporary Agent for Minor Children

Most people are aware that they can name a permanent guardian for minor children in their Will. The Nomination of Guardian is your chance to have a say over who should raise your tiny human to adulthood if you’re unable to do it yourself. Think your stuffy sister will try to make a play for guardianship? Maybe adding Confidential Exclusions of Guardianship is in order. This is the opposite of nominating a guardian. This is a chance to have a say in who you DON’T want taking care of your children.

Here’s something most people don’t think about: what if you’re very much alive, but unable to take care of your child? That’s where the Temporary Agent for Minor Children comes in. This is a chance to appoint someone to take care of your child temporarily until you’re back in the saddle again. This document is so important, and often overlooked. This is what keeps little Timmy from landing in foster care while you’re laid up in the hospital after a bad car accident, or something similar.

A house, a car, retirement savings and more

New HomeMy hope for everyone is, as we age, we’re able to start growing savings and acquire some assets. Maybe it’s a house. Maybe some stocks, mutual funds or other investments. Do you really want your family to have to deal with the Probate Court if something happens to you?

Probate takes time, costs anywhere from a few hundred to a few thousand dollars, and is entirely public. That means that anyone can ‘pull your Probate’ and see who stands to inherit how much and when. It’s prime territory for predators. Time to add a Trust to the estate plan.

Think of a Trust as a bucket. In this case, you’re in charge of the bucket. You decide what goes in it, and who gets to access it. If we have all your assets in the bucket, or automatically flowing into the bucket, then we know exactly where those assets are supposed to go if something happens to you.

In this way, a Trust is going to help you avoid the probate process entirely. Your family will have privacy in their time of grief. And there are some other bells and whistles we can add to a trust: preserve what children inherit until financial maturity; protect beneficiaries from lawsuits and divorces; and minimize estate taxes (which add up quicker than you might think).

That’s all, folks!

For most all of #TodaysModernFamilies, these are all the tools that will ever be needed within their estate plan. But as I’ve said, one-size does not fit all. And it’s never ‘one and done’. An estate plan needs regular maintenance and updating to evolve with you and your life. 

As I wrote in this article, you don’t get your car serviced once. You bring it in every few thousand miles. Sometimes it just needs an oil change; sometimes your mechanic discovers a serious safety hazard that – undetected – could have left you stranded. It’s the same for your relationship with your attorney. “Checking in” is important as your life and your life stages evolve.

We’re here for you when you’re “ready”. Turning 18? Starting your family? Acquiring some assets? Or just feel it’s time? You’ll never hear “you’re NOT ready” from us.

Ask for a Planning Goals Discovery Session to learn what can be achieved through estate planning. We’ll support you every step of the way.

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