If you are reading this, you either need an estate plan or know someone who does. Why is that? In short, everyone older than 18 needs an estate plan. Every adult needs a plan to express their wishes in the event of incapacity or passing away.
Key Takeaways on Who Needs an Estate Plan
- Every person older than 18 needs an estate plan to express their wishes during life and after death.
- An estate plan that addresses incapacity is necessary to protect and provide for yourself and your loved ones without having to rely on the courts. It allows your property and situation to remain private and maximize your control over your situation.
- Every adult needs to keep their medical directives up-to-date.
- The only way to make sure that your wishes are fulfilled, whether who you want to serve in what capacities or where you want your assets to go. There are so many decisions that you need to make, and fortunately, an estate planning attorney can help guide you through those decisions and help you fully understand the implications of those decisions.
What is an Estate Plan?
Your “estate” is all of your assets: home, clothing, cars, bank accounts, retirement account, life insurance policies, furniture, and more. By now, we all understand that we cannot take these things with us when we die, but we can otherwise control where they go through an estate plan.
Your estate plan needs to have either a will or a trust. These documents control where your property goes after you die. You control giving what you have to who you want, when you want, and how you want. You have to take into account the life situation of those people who will receive your property, whether they are minor children, have special needs, or have financial problems or unique life situations that you need to plan for.
Your estate plan should also address the possibility of you becoming incapacitated. We are eight time more likely to become incapacitated this year than die. Therefore, your plan needs to have financial and medical powers of attorney, a HIPAA Authorization, and a Living Will. These documents control your assets and express your wishes regarding medical care, who can access your medical records and talk with doctors, and any “end-of-life” scenarios. By addressing these situations now, you are expressing your wishes rather than rely on a court order, which is public and costly.
While this may be surprising, but families with moderate wealth need incapacity planning more than richer families because the costs associated with getting court orders and court protections are high and these families are less able to afford it. This can affect children’s inheritances and their future experiences.
What You Need to Know
Trying to do your estate plan on your own is not wise. An estate planning attorney knows the law, has deep experience with families, counseling, and the implications of different possible decisions. An attorney will be able to draft the appropriate documents to express your wishes and keep it up-to-date as life changes.