Estate planning starts with identifying your goals. What do you want to accomplish? Why get an estate plan in the first place?
Here are some common goals my clients have for their estate plans:
- Distribute property at death according to their wishes
- Make things as simple as possible for their families
- Avoid probate
- Name guardians for their young children
- Delay big distributions to young children or grandchildren until they reach a responsible age (often 25 or 30)
- Provide for disabled beneficiaries without endangering government benefits
- Prevent family conflicts over property and health care
- Give spouses legal authority to manage singly owned assets like life insurance and retirement accounts
- Put someone trusted in charge of the final affairs
- Ensure someone trusted can manage health care decisions and finances if they can’t
Estate planning is not planning for good times and normal life. It’s planning for crises. It’s planning for the things that change your life and the lives of those who love you forever. It’s a lot like life insurance—you don’t get it because it’s going to benefit you. You get it because your family might need it, if the worst were to happen.
What are your goals? Which is the most important?
Is it more important to keep things simple or control what happens in the future?
Your goals are accomplished by executing estate planning documents. For each document, you’ll need to know what it is and make several decisions about what you want it to say. An estate plan always includes a will, a power of attorney for finances, and a power of attorney for health care; it sometimes includes a trust as well. The decisions you’ll need to make in these documents are generally either who decisions (who will be in charge, who will get the property) or what decisions (what powers they will have, what property they will get).
The rest of this guide gives brief explanations of the basic estate planning documents and the major decisions you’ll need to make in each. By the end you will know what to expect when enacting your own simple estate plan, and you’ll have a head start on making all the important decisions.