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by Contributor

ArtTower, Pixabay, License

(Jun. 4, 2020) — While most people have received sage advice that it is smart to set up a last will or estate plan, the reality is about 50% of older Americans do not have a will or an estate plan in place, despite the guidance.

There are many reasons people assert why they have avoided the steps in estate planning needed to protect assets and to ensure their wishes are met as set forth by the contents in one’s last will & testament.

Estate planning often falls in the ‘procrastination’ pile of paperwork because many people view estate planning as a way to tempt death, as illogical as that may appear. Still, others mistakenly believe that it is expensive to appropriately estate plan.

In reality, choosing to prepare for one’s estate in advance helps people create a helpful state of peace. This peace is generated by the fact that contingency plans have been developed – not during a crisis or a life disruption – but when cooler heads prevail, and better decisions are made.

It is important to note that estate planning is an ongoing process. While the steps in estate planning do not need to be repeated each year, the estate plan should be evaluated regularly to determine if any changes were needed based on life changes – since the date the last estate plan was finalized.

What is an Estate?

From a non-lawyer’s perspective, an estate refers to the net worth of an individual, as perceived by the law’s eyes. An estate can include –

  • One’s home or any other property.
  • One’s automobile, boats, motorcycles, and recreational vehicles.
  • One’s savings, investments, and retirement accounts.
  • One’s artwork or written literature.
  • One’s social media accounts.
  • Any other assets.

An estate also includes a decedent’s debts, like outstanding mortgages or credit card balances.

What’s an Estate Plan?

From a general perspective, estate planning refers to the distribution/division of someone’s assets and wealth. Said another way, estate planning allows someone, prior to their demise, to determine how their assets – liquid, non-liquid, stocks, bonds, real property, jewelry, artwork, etc. – will be divvied up among heirs and beneficiaries after all debts are satisfied.

However, estate planning is more comprehensive. Estate planning includes making choices about personal health care decisions in advance. For instance, some individuals, in accordance with their religious beliefs, will not approve of being resuscitated, or for personal reasons, will not agree to take certain medications.

The health care portion of an estate plan may include a living will or health care proxy, among other documents. These documents represent the written wishes of an individual that are to be implemented by a chosen representative – if the individual may not be able to voice their preferences – i.e., in a coma, a vegetative state or has passed. The health portion of the estate plan sets forth explicit instructions in challenging medical circumstances, so family members are not responsible for making difficult choices without guidance from their loved one through a written health care estate plan.

Estate Planning Documents

As noted above, an estate plan may include a variety of documents – each with a unique and distinct purpose. However, not every potential estate form is needed for each situation. The documents that will be used in an estate plan will be determined by an experienced, qualified estate planning attorney based on the specifics in your personal situation.

The Last Will & Testament

The Last Will & Testament is a foundational document of each estate plan that ensures the decedent’s wishes are respected. A Last Will & Testament is the document that best sets forth policies and instructions regarding the guardianship of an individual’s children.

A last will & testament is a legal instrument that provides for the name(s) of the guardians for any minor children left behind. This is essential because, without explicit instructions, the law prescribes how minor children will be cared for, should an individual die intestate – without a will.

The Take-Away

An estate plan is a valued tool that should be planned for as early as possible. An early start is a smart idea because one cannot predict the future. However, an estate plan needs to be regularly updated to reflect changes to one’s life – like a marriage, children, a business windfall or inheritance.

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