You may have heard the old expression, you can't take it with you. The it that you'd most likely to leave behind requires a plan. When you pass, you can't bring along your bank accounts, your property, your investments. So who gets your wealth? Have you thought about who will receive your assets and how your loved ones will ultimately be taken care of when you pass away? The process of putting together these specific directions is called an estate plan. Many younger people assume that estate planning is only for the old and the rich, but estate planning can be addressed at any time, and it impacts any tax bracket. In fact, estate planning is not only about passing on the assets when you die, rather it includes what directions you would want to provide to your loved ones, or who you would want to take care of your children if you're a parent, for example. The great thing is you can make changes along the way to your estate plan as your life situation changes. Even more important, estate planning is a way to start thinking through these types of decisions, and then put them down in writing, so that way you can communicate it to others. Rather than simply assuming that your loved ones would know exactly what you want, you have the opportunity to get rid of any potential ambiguity and arguments by defining what your wishes are. In the simplest terms, an estate is everything that you own, money and assets, including your home, your car, at the time of your death. When you decide in advance and in writing who will get your assets and your money, that's estate planning. Your heirs are the people who are going to receive your money and your assets after you're gone. The act of giving these things to your heirs is called asset distribution. Your debts are also part of your estate. Anything that you owe on credit cards and loans may have to be paid off first by your estate before any further money or assets are distributed to your heirs. Estate planning is not entirely about money, though, it may also leave instructions for how your incapacitation or your death should be handled. For instance, you may not want to be kept on any life support system if you were in a coma. You may want to be cremated, instead of being buried. These instructions can ultimately be included in your estate planning. Many people honestly struggle with the idea of where to start, or they simply don't think they need to have a plan. The simple fact is that estate planning is going to be different depending on your life stage. What I want to do in this video is go through a rough idea of what you might want to explore based on your unique life stage. First up, are you single without any dependence? You may want to explore a durable power of attorney, letter of instruction, and make sure that you define your beneficiary designations on all of your accounts. Next, are you married without any dependence? You may want to explore a durable power of attorney, letter of instruction, living will, health care power of attorney, and make sure that you define your beneficiary designation on your accounts. Next, do you have any dependence? If so you may want to explore a durable power of attorney, letter of instruction, living will, healthcare power of attorney, will, and define beneficiary designations on your accounts. Now that we talked about what you might want to consider when you're developing your estate plan, I think it's important to summarize what each of those documents does that we listed under each life stage. The durable power of attorney. This is a legal document in which you name another person to act on your behalf if you're unable to do so. You can grant limited or broad powers to that person. Some examples may include being able to pay your bills or make decisions about your investments. A letter of instruction. This is a document that can help organize the logistics of your estate plan and give you an opportunity to provide a personalized message to your loved ones. This document could be used by your loved ones to understand your wishes and easily access everything that you own and owe. A living will. This is a document that expresses your intentions regarding life-sustaining measures. It's important to understand that this expresses what you want, but it does not give anyone the authority to actually speak for you, which is why it's normally accompanied by a healthcare power of attorney. A healthcare power of attorney. This the document that actually authorizes someone to make medical decisions for you in the event that you are unable to make them for yourself. A will. This is a document that provides instructions for distributing your assets upon your death. There are going to be additional provisions as well that could be added in details that your attorney can work through, but for parents, this is also where they might designate a guardian for their children. Beneficiary designations. Beneficiary designations are made on the accounts and insurance policies to establish who would get the account or policy when you pass away. You may want to review these and make sure that they align with your overall intentions, and are going to be updated as your life changes. You might want to educate yourself all that you can and make sure that a professional has your back and can help you navigate the choppy waters of estate planning. Additionally, a professional might be able to help you create the documents that can really make your estate plan official and advise you on how taxes may also impact your plan. Ultimately, you're going to have the final say on how you want your estate to be managed and executed, but a professional could help you arrive an educated, rational, and sensible decision. They could also help you communicate all these objectives so that mistakes and miscommunications can ultimately be avoided.
