How Estate Planning Establishes A Legacy

According to a survey by Caring.com, 60% of Americans don’t have a will. This leads us to the question of why. Why have so many Americans delayed this portion of their estate plan? That same survey noted the top two answers were:

• “I just haven’t gotten around to it.”

• “I don’t have enough assets to leave anyone.”

Estate planning has notoriously taken a back seat to many other financial processes, and that is not super surprising. Many people feel that they want to plan for their future, not the future after they are gone.

But estate planning is so much more than signing paperwork, having uncomfortable family conversations, and financial housekeeping, it really is about yourself, your future, and the legacy you wish to leave behind.

Nuts and Bolts

Estate planning is the process of organizing, securing, and distributing one's assets. A crucial part of financial planning, it seeks to ensure your financial and legal documents are in order when you are no longer able to control them.

As demonstrated by the survey above, many people are apprehensive to creating this plan. Shining the prism through a positive light, an estate plan gets you and your family ready for the future. It takes some of the uncertainty out and can establish a sense of order and calm.

Here are some factors to consider when creating your estate plan.

• Establish beneficiaries

Beneficiaries are people who will gain control of your assets should you no longer be there. You will need beneficiaries for your insurance, 401(k), IRA, savings accounts, checking accounts, and other assets. Updating these on a regular basis is important so that you have the right people assigned.

• Assign a power of attorney

This person will be expected to make financial and legal decisions on your behalf. Choose someone who will have your best interest in mind and honor your wishes.

• Name a medical directive

Similar to a power of attorney, a medical directive will be able to make medically-related decisions for you should you be unable to make them yourself.

• Create a will

Your will is an important, legally binding document. It outlines your wishes for your assets after you pass away.

A Second Chance

This world allows us to make our mark in more ways than one. In this vein, estate planning becomes so much more than the nuts and bolts from above, it becomes one of the ways we are remembered and how we want that memory to be honored.

More than that, estate planning gives us the opportunity to have conversations with our loved ones about how they want to carry on after we pass away. Talking to your kids (if they’re minors - and old enough to understand your intentions) about who they want to live with, or what the plan is for them if you pass away, may be uncomfortable. But it may also bring you all closer together, and help to bring an added layer of security or peace of mind because there are no questions around their future - even in a dire circumstance.

The same is true for speaking with your adult children and other heirs about your estate and the legacy you want to leave. Having them be part of that conversation can help to inspire them, and ensure that your vision is carried on. Even though estate planning can be tough, it also promotes connection and conversation with your loved ones.

Your legacy is dictated by you and your vision. A roadblock that many people face when estate planning is the thought that they do not have enough to pass down to other people. But whether you are establishing a scholarship or leaving your pearls to your eldest granddaughter, your assets have value. You probably have more assets than you think:

• Any bank accounts (checking, savings, etc.)

• Car

• House

• Jewelry and other valuable accessories

• Insurance plans

• Retirement accounts

All of these things hold value. So if you think you don’t have anything to put in order, you might want to think again.

Value is subjective, and in this case, that is a great thing! Your legacy is exactly that, yours. Creating a plan that works for you and your loved ones is all you can ask for. There are many ways to use your assets as part of your legacy:

• Establish a scholarship for students at your Alma Mater

• Donate assets to your favorite charity

• Leave property to family members/loved ones

• Divide money and other assets among people you care about

Estate planning combines logic and emotion. While there are many practical aspects to its construction, in the end, it is about establishing your legacy and giving you a second chance. If you have questions about legacy or estate planning, I encourage you to reach out. As a comprehensive financial planner, organizing the financial aspect of your estate is something I can help with - and I’d love to answer any questions you may have.