What is an estate plan and why do you need one? An estate plan gives directions to your family, friends, and loved ones about what should happen to you and your assets at the time of your death, or if you become incapacitated.
Through the various legal documents your attorney creates, an estate plan addresses who should be guardian for your minor children, who should make medical decisions on your behalf when you can’t, and who your assets should pass to and support, as well as who you entrust to carry out these plans after your death.
Undertaking an estate plan can be overwhelming and may require difficult conversations. But the comfort of having a completed (and legally binding) plan is often an overwhelming relief!
As you start your estate planning process, please refer to the considerations and legal documents outlined below.
To craft an estate plan, your attorney will need the full picture of your assets: real estate, retirement accounts, taxable brokerage accounts, cash, and other property.
Your attorney will also need to know about the important people in your life and how you would like to provide for them. For example, you may want certain family or friends to receive your assets outright after your death, but provide protections (against creditors, divorcing spouses, or other influences) for others by using a vehicle such as a trust. Or, if you live in a state with inheritance or estate tax, or if your estate will be subject to federal estate tax, you may want to make choices in your estate plan to reduce your taxes.
Modera tip: The guardian does NOT need to be a financial whiz, rather someone who cares for your kid(s) and shares your values.
Modera tip: Certain states allow you to legally bind your agent to follow your wishes, whereas others do not.
Modera tip: Some hospitals may also have their own forms they prefer patients to fill out.
Modera tip: A durable power of attorney is in effect as soon as it’s signed and does not require incapacity.
Modera tip: Unless assets are transferred to your revocable trust during your lifetime, they will go through probate.
Time, life changes, and moving to another state are all triggers for updating your estate plan. Your circumstances, net worth, and wishes will change over time, as will the circumstances of your assigned executor and those inheriting under your plan. With all of that in mind, once finalized, your estate plan should be reviewed every 5-7 years.
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