Everyone Needs an Estate Plan: In this video and the article below, Haley Ellis CFP® CPFA® discusses the components of an estate plan including wills, power of attorney, beneficiaries and other key elements of an estate plan.

An estate plan is a comprehensive set of legal documents and strategies designed to manage an individual’s assets and affairs during their lifetime and distribute those assets according to their wishes after death. Estate planning is not only about distributing assets but also about ensuring that your financial and healthcare decisions are carried out in the manner you desire if you become incapacitated.

Key components of an estate plan may include:

Will: A will is a legal document that outlines how you want your assets to be distributed after your death. It also allows you to appoint a guardian for minor children and an executor to manage your estate.

Trusts: Trusts are legal arrangements that allow a third party, or trustee, to hold assets on behalf of beneficiaries. Trusts can be used to manage assets during your lifetime, provide for loved ones with special needs, minimize estate taxes, or control the distribution of assets over time.

Power of Attorney: A power of attorney grants someone the authority to make financial or healthcare decisions on your behalf if you become incapacitated. There are two main types: financial power of attorney and healthcare power of attorney.

Advance Directive or Living Will: An advance directive or living will is a legal document that specifies your wishes regarding medical treatment and end-of-life care if you are unable to communicate your preferences.

Beneficiary Designations: Certain assets, such as life insurance policies, retirement accounts, and bank accounts, allow you to designate beneficiaries who will receive the assets directly upon your death, bypassing the probate process.

Letter of Intent: A letter of intent is a non-binding document that provides guidance to your executor, trustee, or family members about your wishes, preferences, and instructions regarding specific matters not covered in other estate planning documents.

Guardianship Designations: If you have minor children, you can use your estate plan to designate a guardian who will be responsible for their care in the event of your death or incapacity.

Estate planning is not only for the wealthy; it is essential for anyone who wants to ensure that their assets are distributed according to their wishes and that their loved ones are provided for after their death. Working with an experienced estate planning attorney or financial advisor can help you create a customized estate plan that meets your goals and addresses your unique circumstances. Additionally, it’s crucial to review and update your estate plan periodically to reflect any changes in your life, such as marriage, divorce, births, deaths, or significant financial changes.

Article: Everyone Needs an Estate Plan

It’s never too soon to get your estate plan in order. Here are some tips to keep in mind.

By Haley Ellis CFP® CPFA®

Every individual needs some form of an estate plan to protect their wishes and loved ones. Your estate consists of everything that you own (aka your assets), and although death may seem far away, it is never too soon to get your estate plan in order. Estate planning is the process of making arrangements for your incapacitation or death, including deciding who your assets will go to, stating the type of end-of-life care you wish to receive and designating a person who will be responsible for executing your requests. You are never too young to start making these arrangements, and the process does not need to be complicated or expensive. Before you can make a plan for your assets, you need to first list out what you actually have. This may include: cash, real estate, retirement and investment accounts, vehicles, life insurance policies, businesses and other personal belongings. Also, list any outstanding debt, especially debt that has co-signers or joint ownership, as that will not disappear upon your death. Most individuals meet with an estate attorney to execute the necessary estate planning documents, but for simple cases, you can easily create these documents online through platforms such as Trust & Will or LegalZoom in less than 30 minutes.

The basic components of an estate plan include:

Last Will & Testament

Name a guardian for children and pets. Who do you trust to care for them if you passed away? Designate a backup guardian just in case, and document your wishes for your children’s care. Establish an executor. This is the person that will be responsible for ensuring your wishes in your estate plan are executed. Consider establishing a digital executor as well for your digital assets. Determine how your assets will be distributed. You can leave all of your assets to a specific person, multiple people or to charity. You can list specific gifts to be distributed and exclude certain individuals from receiving anything, if desired. State your final arrangements, including you final resting place, ceremony type and any special requests.

Living Will

Specify your wishes for medical care in the event you can no longer make those decisions for yourself, including methods to keep you alive, pain management and organ donation.

Power of Attorney (POA)

List an individual that you trust to handle your affairs and act on your behalf if you are unable to do so due to permanent illness or disability. You can limit the power that your designated POA has by listing out specific authorizations and/or time periods. A healthcare power of attorney grants an individual the ability to speak with healthcare staff, make decisions on your behalf for medical treatment and care and can be required to make end-of-life decisions. Expressing your wishes in your living will can make this process much easier for your healthcare POA. A financial power of attorney allows your appointed individual to make choices about your property, finances or investments, depending on the scope that you list, including writing checks, completing tax returns and managing investments.

HIPAA (Health Insurance Portability and Accountability Act of 1996) Authorization

Allows those listed to access your private medical records when needed. Most estate planning documents need to be signed with witnesses and notarized to go into effect, and certain documents and requirements vary state to state. More complex family or business situations may involve adding a trust or other estate planning strategies to provide greater control over the distribution and timing of your assets, as well as avoiding probate. Always consult with an estate planning attorney if you have questions or need guidance with creating your estate plan. You can find one in your area on the American College of Trust and Estate Counsel website. Don’t forget to review and update your will and beneficiaries every few years and with any major life changes. Always make sure your beneficiaries on your retirement accounts and insurance policies are up to date, as those usually override a will. Name contingent beneficiaries in case your primary beneficiary passes away before you do. It is never too soon to prepare for you and your family’s future. You will have peace of mind, and your loved ones will thank you.

About the author: Haley Ellis CFP® CPFA®

Haley Ellis CFP® CPFA® Haley Ellis is a CERTIFIED FINANCIAL PLANNER , Financial Planner & Integrator for Allegiance Financial Group Advisory Services based in Carolina Beach, NC providing highly personalized financial planning and investment management services. Haley is truely passionate about financial empowerment, specifically for women and the next generation, and loves the opportunity to motivate and guide others to take charge of their financial lives. Haley can be reached at haley@afgas.net.

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