Why it's important to have an estate plan
Written by Michelle N. Ogborne

Why it’s important to have an estate plan

When you spend every day giving your best to your family and career, you’re creating a successful life. In fact, you’ve probably spent a lot of time considering outcomes of major decisions over the years: buying a car that can give you 200,000 miles of problem-free driving; piano lessons that can develop your child’s natural talent; saving money in your retirement account. After all that careful consideration, you should give your attention to one more plan. Here are some of the important reasons why you should create an estate plan as soon as possible.

Reasons an Estate Plan Matters

You didn’t get where you are by making bad decisions. Why start now? Creating an estate plan can give you peace of mind that your matters will be managed appropriately after you die. It can relieve some of the stress your loved ones will feel while grieving for you since they know you carefully considered how to handle your affairs. Here are a few considerations:

1. Plan as thoroughly for your death as you have for your life. Leave your family with the comfort that you cared enough about their well-being to create an estate plan.

2. You worked hard for what you have! Do you really want your 24-year-old brother to handle your estate? (He may finally get to invest in that chinchilla farm he’s always talking about!) What happens to your money and who it can help is another reason why an estate plan matters.

Reasons an Estate Plan is Necessary

There are many logical reasons why you need an estate plan. You don’t have to be wealthy or close to retirement. In fact, you should create a plan as soon as possible.

Let’s review the estate planning basics. The first question you should ask yourself is, “If I died tomorrow, what do I want for (my kids, my partner, my parents, my company)?” The purpose of these documents is to distribute your assets according to your wishes. Here are a few reasons why an estate plan is necessary:

  • Control your assets. If you die without a plan and the court settles your estate, there may be unintended beneficiaries. Worse, people you care about may be excluded. How would you feel if your estranged father received a portion of your estate? What if the neighbor you’ve spent holidays and traveled with for decades was excluded?
  • End the war before the battle. Even loving and connected families fight. Your estate plan leaves no room for interpretation or confusion. Everyone will be aware of your decisions, even if they don’t agree with them.
  • Protect your children. If both parents die before a child turns 18, the courts will decide who will raise your kids. That decision can be based on the nearest relative, not necessarily the most competent or loving relative or friend. Without an estate plan, your wishes will be insignificant, since no one is aware of them.
  • Reduce taxes. There are ways to reduce your beneficiaries’ taxes. Without an estate plan, Uncle Sam, not your relatives, may get a big portion of your money.

What to Include in Your Estate Plan

Legal and informative documents in your estate plan portfolio may include:

  • Health care proxy
  • Letter of intention
  • Medical power of attorney
  • Trust, if applicable
  • Will
  • Important documents
    • Annuity contracts
    • Bank and/or credit union accounts
    • College savings plans
    • Cyber assets (web page, domain name, blog)
    • Divorce or Separation documents
    • Fraternal benefits
    • Funeral arrangements
      • Cemetery plot documents
      • Prepaid plan
    • Installment contract, promissory notes
    • Job-related benefits
    • Life insurance policies
    • List of advisors
    • LLC, partnership, corporate documents
    • Marriage license
    • Medical information
      • “DNR,” if applicable
      • Health insurance information
      • Long-term care insurance policy
    • Military service information
    • Pension documents
    • Real estate deeds
    • Retirement account statements
      • 401(k)
      • IRA
      • Other
    • Safety deposit box information
    • Social Security information
    • Stocks, bonds, investments
    • Tax returns (including tax information to prepare current tax return)
    • Website user ids, passwords, verification questions
    • Vehicle and/or motorhome titles

Update Your Estate Plan

Life is complicated, but your estate plan doesn’t need to be. – Michelle Ogborne

It is important to entrust these documents to someone with whom you have confidence. As your life changes, your estate plan will need to be updated. Events that impact your estate plan include:

  • Acquisitions
  • Bank account changes
  • Births and/or adoptions
  • Career changes
  • Death of partner
  • Divorce
  • Illness that may lead to incapacitation
  • Marriage
  • New investments
  • Relocation

Contact Ogborne Law today to discuss your estate plan options.