Who Needs an Estate Plan?

You may think of estate planning as something only wealthy people need. But the truth is, a basic estate plan is important for anyone who wants to ensure that his or her final wishes are carried out.

Your Will is the cornerstone of your plan. It states who will receive your property upon your death. A will can also name a guardian for your minor children in the event that neither parent is living.

Advance Directives designate someone to make medical and financial decisions for you if you’re incapacitated and unable to make them yourself. A living will (or health-care proxy) states your wishes regarding any life-sustaining medical interventions you would or wouldn’t want. A durable power of attorney allows the person you designate to handle financial matters on your behalf.

Beneficiary Designations typically are required for retirement accounts and life insurance policies. A beneficiary designation supersedes your will. At your death, the assets in the account pass directly to the person or persons you’ve listed as your beneficiary/ies, no matter what your will states.

The Executor or Personal Representative named in your will settles your estate and guides it through probate. Your representative should have access to your will and any trust documents, as well as a list of insurance policies, retirement plans, financial accounts, real estate deeds, and mortgage and loan agreements, along with your account numbers and passwords. Include a list of people who should be contacted upon your death, such as relatives, friends, and your attorney, and their contact information. And don’t forget social media accounts. Provide your representative with your passwords so accounts can be updated or deleted. Keep this information current.

Life Insurance is an important estate-planning tool. Life insurance benefits can be used to sustain your family through the loss of your income, pay your funeral expenses, benefit a charity, or fund your children’s educations. Since life insurance proceeds pass outside your will, the money will be available without waiting for probate.

Trusts are legal entities that allow you to place conditions on how certain assets are distributed or minimize estate and gift taxes.

Consult your financial professional and estate attorney for help with creating an estate plan.