Plan for the Future

Estate Planning Basics: 5 Essential Steps to Protect Your Family and Your Future

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Getting your will done isn’t usually the type of thing that tops anyone’s to-do list. Yet creating an estate plan is one of the best things you can do right now — for your family and peace of mind — to ensure your wishes are carried out in the future.

With a little thought and preparation now you can save your loved ones a lot of time, stress and conflict, not to mention legal and financial woes in the future. Here are the five essential steps to follow to help ensure the protection of your loved ones and your legacy.

Step 1: Think about what you want to happen.

Before you call an attorney to get started on your estate plan, take some time to consider your wishes for after you’re gone, as well as a few important questions and potential scenarios, such as:

  • Who will make decisions in my behalf if I’m sick or injured and unable to do so?
  • What type of life-sustaining measures do I want as I near the end of my life?
  • Who will care for my children if I die before they turn 18?
  • How will I divide my estate after my death?

While it can be difficult to initiate, having a discussion with your loved ones in advance helps you clearly communicate your intentions and gives everyone a chance to ask questions or voice their concerns.

Step 2: Create your plan.

Your estate plan will include your will and several other essential documents. A simple will may be appropriate if your financial situation is pretty straightforward. For instance, perhaps you’ve never been married nor had children, have few assets and plan to leave everything to one close relative.

However, people’s circumstances which involve minor children, ownership of property and various assets such as investments or retirement savings accounts are more complex. An attorney will ensure that your documents are completed, witnessed, signed, filed and stored in accordance with the laws of your state. Here are the documents that may be a part of your plan.


Wills aren’t just for wealthy elderly folks. Regardless of your marital status age or the size of your estate, you should have a will. Your will designates who you want to receive your assets when you die. You may also want to designate how certain personal memorabilia such as jewelry or family heirlooms are divided.

In addition to dividing your assets, your will should also name someone to care for your children if both parents die before the children are 18. Children can’t own property until they’re 18, so you may also name a guardian to manage the children’s assets until then. Their financial guardian may or may not be the same person you’ve named as their personal guardian.

If you die without a will — known as dying “intestate” — your state law will decide how your assets are divided. Without a will the probate period — the amount of time during which the legal system determines how your assets should be distributed — could be extended significantly. An extended probate period is generally time-consuming and involves expensive legal fees, decreasing the inheritance that is ultimately distributed to your beneficiaries and the speed in which they’ll receive it.

Additionally, if you have minor children and both parents die without a will, the court system would name the children’s personal-care and financial guardians. This is a time-consuming, expensive process that could result in your children being cared for by someone you wouldn’t have chosen.


A trust describes exactly how and when your assets will be distributed after your death. A trust can also be used to minimize taxes, avoid probate and name who will care for your minor children after your death.

People often use a trust in combination with a will. The primary difference between a trust and a will is that a trust avoids the probate process of transferring property from you to your beneficiaries. The following are two of the most common types of trusts:

  • Caring for minor children - A trust can be established for children whose parents die before the children turn 18. Often a trustee will use the trust to pay for the children’s expenses until age 18.
  • Special needs trusts - If you have a dependent with a disability, a special needs trust can help provide for him or her to avoid compromising Medicaid, Social Security or other governmental assistance.

Powers of Attorney

In addition to planning for distribution of your assets and care of your children after your death, you should also plan for what will happen if you become unable to make decisions yourself. The power of attorney documents you should consider include:

  • A financial power of attorney which appoints someone to manage your finances if you are incapacitated.
  • A health care power of attorney that appoints someone to make health care decisions for you if you are incapacitated, i.e. unable to communicate your wishes.
  • A living will outlining your specific wishes for life-sustaining treatments. For instance you may want your living will to include a “do not resuscitate” order (DNR).

Your health care power of attorney and your living will combined can also be called your “advance directives,” “health care directives” or “medical directives.” Serious medical conditions and end-of-life situations can be understandably emotional for your loved ones; a health care power of attorney and living will can minimize their stress at a difficult time.

Step 3: Store your estate planning documents safely.

Once you’ve created your will and any other documents that make up your estate plan:

  • Organize your documents and keep them together.
  • Store the original documents in a protected place that is accessible to your estate’s executor, like a safe-deposit box or a fireproof waterproof safe at your home.
  • Let your attorney and your executor know where the original documents are stored and make sure your attorney has copies of the documents in case the originals are lost or damaged.
  • Also consider creating electronic copies and storing them digitally.

Step 4: Talk to your loved ones about your estate plan.

To avoid surprises later you should have regular talks about your estate plan with your loved ones, as well as anyone who will be involved in carrying out your intentions, such as the executors or agents of any of your plans.

In addition to the contents and location of your will and other plans, you should make sure everyone knows the location of any important financial, medical and personal documents.

You may also want to have a written document to detail instructions for post-death plans and requests such as organ donation, funeral arrangements, cremation or medical donation. This document should be shared with loved ones and kept separately from your will and other estate planning documents in case they aren’t read until after your funeral.

Step 5: Review your estate plan and update regularly.

As your life changes, so will your estate plan — and corresponding documents and beneficiaries. Life events like the following will probably affect your estate plans:

In addition to regularly reviewing your will trusts and powers of attorney, you’ll want to make sure your beneficiary designations are current for investments such as life insurance policies, retirement plans and bank accounts.


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