Anxiety, Fear, and Dread.
These are probably the most common feelings when thinking about estate planning.
These feelings are totally normal.
The estate planning process isn’t exactly a topic that your close friends want to chat about when you’re out for weekend fun. But I’m here to simplify and bring understanding to Estate Planning, so your anxiety will decrease, (and those weekend friends may start asking why you’re so relaxed!)
The best part? Once your plan is in place, you can take comfort in knowing you and your family will be taken care of.
That’s why I’m going to talk about the 3 most important components of estate planning: protecting yourself, protecting your family, and protecting your assets.
Remember being 14 years old and wishing you could just call the shots for once?
Well, your time has come now, my friend.
Having a say on how things happen to you is one of the many “perks” of being a grown-up (something you really wanted to be able to do as a teenager, am I right?)
Now, you still may be of the teenage mindset of “I’m good, nothing bad’s going to happen to me. In my heart, I still feel 18!” The good news is that you can KEEP that mindset — but now that you are wiser, you can be more responsible than your 18-year-old self.
You know that life can quickly change in an instant, regardless of your mindset.
Remember what happened to Britney Spears?
Since Britney didn’t have a plan in place of how she’d want things to be handled if she was ever unable to make decisions for herself, decisions were made FOR her by her father and the courts.
Her conservatorship was under 2 parts:
- Financial (control of her income and financial decisions.)
- Physical (control of her health and well-being.)
Moral of the story: having a parent (or the courts) be in control of your health, income, and a lot of your decisions as an adult is not a fun time.
So how do you avoid having this happen to you?
Legal Documents Every Adult Should Have
Well, there are 4 important documents that every adult (18 and over) should have to legally protect themselves.
- Medical or Healthcare Directive (also known as a living will) – A living will is a legal document that states your wishes for medical treatment if you’re in a terminal condition. (i.e., if you’re in a coma or on life support, your family and doctors will have your written medical wishes since you are unable to communicate it to them.)
This will give your loved ones some peace of mind knowing what you would want, instead of making guesses.
- Durable Power of Attorney for Healthcare- This is a written document where you’re designating someone as your agent or attorney-in-fact to take action on medical decisions on your behalf. They are your “voice” if you’re incapacitated and can’t comprehend information or communicate your decisions.
Your agent can also make decisions regarding your care up until recovery or death.
- HIPAA Authorization- This document gives your doctors the authorization to talk about your medical condition with your designated attorney-in-fact (aka, your Durable Power of Attorney.) If you don’t have this very important document, they may be without the essential information needed to make those decisions.
- General Durable Power of Attorney (to cover finances)- This is someone who you appoint to be in charge of your finances. So everything dealing with financial matters will be given to your agent of choice.
They are authorized to act on your behalf if you become incapacitated or unable to speak for yourself.
All of these documents have one thing in common, and that’s to make sure YOU have the last say in what happens to you.
It’s a very powerful thing, and definitely not something that you want to put off until later. And once they’re in place you don’t have to worry about them anymore, (except to update the forms as needed over the years.)
Having all of this taken care of is one huge sigh of relief for your family and loved ones (whom you also want to protect.)
Protecting Your Family and Loved Ones
It’s best to be proactive when it comes to protecting your family and loved ones. The documents mentioned earlier are definitely part of it. But there’s also more to consider.
Life Insurance- This is something that’s extremely important for everyone to have (especially if you have young children and a significant other.)
After you die, your life insurance provides your beneficiaries with cash to cover funeral costs, final medical expenses, outstanding debt such as a mortgage, or simply to replace income for a while. The cushion from that cash doesn’t replace you but does give your loved ones some time to grieve and heal without compounding their losses.
Buying Life Insurance is a relatively inexpensive way to financially protect your family once you have passed.
Having a Trust- Making sure you have a trust in place is another smart thing to do for your family. A trust is a legal document where you will keep and manage your assets as long as you are living and able. After you pass away, the third party whom you’ve designated will have access.
Having a trust can simplify the management of assets if you are incapacitated, avoid the headaches of probate, and give you the ability to guide your family even long after you die.
Protecting Your Assets
Most people are very surprised when they find out the difference a planned tax strategy can have on their future standard of living (remember that feeling in April when you get a refund instead of owing?)
As I’m sure you already know, your assets include much more than just your checking account balance and home equity. When planning a comprehensive tax strategy for you and your estate, many types of assets (as well as your personal financial goals) come into play.
Your current and future assets can be strategically positioned to give you the most beneficial outcome that can be achieved. An estate lawyer can devise plans for you that will help you to keep more of what you’ve earned through your career, investments and social security.
Each family’s unique financial situation can be reflected in their estate plan. Maybe they are concerned about the next generation inheriting and controlling a large 401(k) too soon. Maybe they know someone in the family who went through a bad divorce and lost the money from an inheritance. Maybe they have a child with special needs and want to provide the best possible life without losing access to necessary benefits. Maybe they have been fortunate and want to protect as much wealth as possible from estate taxes. Your estate plan will reflect your goals and priorities.
Covering the Digital Aspect of Your Assets
Are you the one who’s always taking pictures at family gatherings? You’re constantly bragging to everyone about the thousands of photos and videos you’ve captured over the years (and it’s somewhere in the 3,000 to 5,000 range!)
If something happened to you, would your family members know the passcode to get into your phone to access those precious digital memories?
Or a worse thought — you try a passcode that’s incorrect and you get locked out for good. And before you know it, you’ve just lost thousands and thousands of pictures and videos that you can’t get back.
Believe it or not, this happens much more often than people think. That’s why it’s extremely important to have a file (that someone can access) where you keep your passcodes, usernames, and answers to security questions for every device, account, app, and platform that has valuable information on it.
Don’t take a chance on losing all of your valuable memories and vital records.
The Good News: You Don’t Have To Do This Alone
As you can see, there’s a lot to think about when you’re in the estate planning process. And quite frankly, you may be overwhelmed by the time you’ve reached this paragraph. But I do have some good news for you. You don’t have to do this alone.
I’m here to help you, and make sure you get the best possible outcome when it comes to your estate planning. Let’s be proactive and get everything done the right way. I want you to feel comfortable and confident that all will be taken care of when your time comes.
When you’re ready, let’s have a quick 15-minute chat. That way, we can discuss where you are in your estate planning process, and how I can best help you. We’ll then schedule a longer meeting where we can go over all of the details and questions you have.
My phone number is: (816) 550-0644.
I look forward to hearing from you!
Kirsten Schroeder Larsen is an estate planning attorney licensed in Kansas and Missouri. She is passionate about helping people work through the difficult and often emotional process of end of life planning.
If you have questions or don’t even know where to start, Kirsten can help. Her thoughtful and compassionate demeanor will put you at ease. She’ll guide you through the process of ensuring your family is taken care of when you leave this world.
This information is not, nor is it intended to be legal advice. You should consult an attorney for individual advice regarding your own situation. The material on this website does not create an attorney-client relationship between you and Schroeder Larsen Law, PA.