What is estate planning?

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We spend a lot of time planning for life’s big milestones: buying a home, having a baby, entering retirement — but there’s one milestone that often gets overlooked.

The end of life isn’t something most people want to think about, yet it’s something we all need to prepare for. Estate planning is all about ensuring a smooth transition when it’s time for your loved ones to take over your affairs.

Most people think of estate planning as designating heirs and writing a will, but it involves much more than just deciding who will inherit your legacy. It’s also an opportunity for you to:

  • Choose a guardian for your children.
  • Customize your end-of-life experience.
  • Make funeral arrangements so your loved ones don’t have to.
  • Minimize taxes on the wealth you leave behind.
  • Avoid family discord and expensive legal battles.

Estate planning allows you to exert some control over a phase of life that often feels uncontrollable. The more planning you do now, the easier your end-of-life transition will be for both you and your loved ones.

What an estate plan includes

There are a lot of important questions to ask and decisions to make when you’re creating an estate plan. Who will receive your wealth and possessions? Who will take care of your dependent children? Who will make medical decisions or pay the bills for you in case you become incapacitated? What type of end-of-life care do you want to receive?

Once you’ve made these decisions, you’ll need to put them on paper. An estate plan typically includes:

Will: Your will is the cornerstone of your estate plan. In it, you can express your final wishes, including the distribution of your wealth, and determine who will be in charge of carrying them out.

Trusts: A trust serves as a vehicle for directing not only who receives your wealth, but under what circumstances. For example, you can hold a young child’s inheritance in trust until they come of age. You can also use trusts to ensure the swift distribution of your assets after death and to minimize tax liability for your heirs.

Living will: If you become incapacitated, your living will dictates what care and treatment you want to receive or refrain from. It’s often combined with a durable power of attorney, which appoints a surrogate to make decisions on your behalf.

Power of attorney: This document appoints an agent to make decisions and act on your behalf in case you become unable to. It can be general, granting the person broad powers, or restricted to specific decisions. It’s only valid if you sign it while you’re mentally competent, so it’s important to plan ahead.

When to consider making an estate plan

Everyone needs an estate plan, regardless of where they are on their financial journey. It doesn’t matter how much or little wealth you have – an estate plan makes it easier for your loved ones to receive your legacy and cope with their loss.

There are times when estate planning is especially important. For example:

  • You’re about to get married.
  • You just bought a new home.
  • You’re growing your family.
  • You received a new asset or large sum of money.

Once you decide it’s time to make an estate plan, our Investment Services team can help you get started. We’re here to guide you through the process and make the best possible decisions for you and your loved ones as you prepare for one of life’s biggest milestones.

Interested in learning more about how to leave your legacy with estate planning? We’re here to support you. Connect with our team today to learn more.