Defining Your Legacy: Estate Planning Basics

What would you like your legacy to be?  This question often comes with conflicting emotions about how to detail your last wishes in a respectful way that’s easy for your family to understand. Learn the basics of estate planning by asking a few questions:

What are the different types of estate documents and what does each do?

Will or Living Trust

• This is your final declaration of how you would like your assets and family to be treated after your passing. Your will can also create trusts for minor heirs and list any guardians, minimize state and federal estate taxes (including future taxes for beneficiaries), and take into account any potential conflicts between family members.

Living Will

• Your declaration that you do not want life-sustaining treatment if there is no hope for recovery. The benefit of having this on file is to lower the emotional and financial costs to your family should you become incapacitated.

Medical Power of Attorney or Durable Healthcare Power of Attorney

• These documents can grant someone power to make medical decisions on your behalf upon your incapacity and ensure that a trusted person, rather than doctors, has the final say in your care. However, if life cannot be sustained, the power holder may simply allow the living will to determine the next steps, so it’s recommended to have both prepared.

Durable General Power of Attorney

• The general POA assigns someone to manage your assets if you are incapacitated. It’s important to be very detailed in your draft to ensure that your POA has the exact amount of power over your finances that you prefer. If the document simply says to ‘allow all authority,’ there may be restrictions placed on the power holder in making decisions and handling taxes.

Personal property disposal list

To create this list, you’ll want to ask your beneficiaries what assets or personal property they would want to inherit from you; if you’re married, you’ll also want to detail what assets belong to you versus your spouse.

 

What specific situations should I consider when planning?

Do you have any upcoming health procedures? What about beneficiaries who are minors or have special needs? Some specific situations require more detailed planning, so it’s important to ask plenty of clarifying questions. Check out our comprehensive checklist below, or download a copy here.

How often should I update my estate plan?

It’s important to make sure your portfolio is up-to-date and that all contact information is complete and accurate, so you should typically review your plans annually, or when the following life events take place:

• After the birth of a (grand)child
• Children turn 18, go to college, or get married
• New marriage or divorce
• Retirement
• Death, disability, or chronic illness of a spouse/family member
• Selling/refinancing your business
• Purchasing/selling your home
• Inheriting substantial funds
• Cognitive issues start to arise

Ready to start preparing your plan? Reach out to us if you need any assistance finding a reputable estate attorney, or if you have questions about establishing your estate plan. We’re happy to help you and your family feel confident about your future legacy.