The beginning of a new year always brings us the opportunity to make positive changes in our lives. Over the years, we’ve all set resolutions to lose weight, quit smoking, save more money, spend less, spend more time with our loved ones, etc. But there’s one resolution that I’ve never seen anyone talk about; one that we should really all consider.
I’m talking about creating or reviewing our estate documents. Yes, estate planning. Ok, so now that I’ve probably lost half of the people reading this, I’ll speak to the other half. Nobody likes to think about, let alone do, estate planning. We don’t want to think about our death, even though I’m pretty sure it’s eventually going to happen to all of us. But planning for how things are handled at our death is only one part of estate planning. The other part is planning for the possibility of becoming incapacitated. But no one likes to think about the possibility of a terrible illness or accident either.
As much as we don’t want to go through the estate planning process, it’s important that we do so. After all, estate planning is simply capturing the way we want things to be handled in the event of our death or incapacity. And who is better equipped to make those decisions besides us? And, if we take care of it, then we spare our loved ones from having to make hard decisions during a very difficult and emotional time.
For most people, an estate plan consists of a few simple documents. First, there’s a will. The main purposes of the will are to name the person you want to handle your estate and to document how you want your assets distributed when you pass away. But, if you are a young parent, there’s another very important reason to have a will. It will let the courts know who you want to serve as your child’s guardian if something were to happen to you.
Then there’s a document known as Health Care Directives. It can serve as a living will, which will detail the level of medical treatment you desire in the event that you are not able to communicate. It will also allow you to name a person who you want to make health care decisions for you if you can’t.
Next, there’s a Durable Power of Attorney. This document allows you to appoint the person who you would like to make financial decisions for you if you are unable to.
Finally, you should also consider your digital estate plan. This is something relatively new, but it reflects the age in which we live. If something happens to you, how do your loved ones handle your digital assets like your online photos and Facebook account? And how do they access your computer and passwords to all of your online accounts? Having a plan in place to answer those questions can make it much easier on our loved ones.
It is often said, that if you don’t have a formal estate plan in place, then your state has one for you. It’s true, the state has regulations in place on how things are handled when someone does not have estate documents. But wouldn’t you rather make the decisions than some government agency?
So, if you don’t have an estate plan in place, you could make it a resolution to get it done as soon as possible. There are a number of ways to get it done. We always recommend seeing an attorney who specializes in estate planning; then you know that it’s done properly. And, it’s not very expensive.
If you do have an estate plan in place, make a resolution to review your plan to see if it’s still appropriate. Lives change and laws change, so it’s important to make sure your plan is still up to date.
Putting an estate plan in place is not fun, and involves thinking about some unpleasant possibilities. But, but once you have it done, I can guarantee you’ll feel good about having checked it off your to-do list. And then you can get back to working on those other resolutions.