The weather was beautiful yesterday and the kids had a great time running around our back yard looking for eggs stuffed with candy. While this is a fun way to spend a sunny April Sunday morning, when it comes to your estate planning, hunting is not how your children want to spend their time. If you don't ever put together a will, when you die, your family is left to sort out your affairs. Rather than being able to divide your assets the way you would like, they will be forced to follow the law in your state and distribute the assets the way your legislators think it should be done. For many people, this may not be a big deal, but if you have family members who you can't stand and would never give money to, they may end up getting a lot more money from you than you would ever give them.
The Easter Bunny Method
If you choose not to do any estate planning (a will or trust), then you are playing Easter Bunny. When you die, there are no instructions for your family to follow. They have to figure out where your assets are located, notify certain living family members of yours and likely have to spend a lot of time and money in your local probate court to sort out your estate. At least when your kids go hunting for Easter eggs, you are usually there to "guide" them to where the Easter Bunny placed the eggs.
A Smarter Way to Plan
A smarter way to approach your affairs is to create an estate plan of some type. It doesn't have to be a complex trust that spans hundreds of pages. It can be a simple will that you prepare with an attorney that makes sure everyone knows where you want your assets to go. Along with your will, it's also important to use healthcare documents to be sure that the correct person is making decisions for you if you become sick and unable to speak for yourself. If there are assets that would need to be managed, a financial power of attorney can also be an important document to have in your planning.
Another way to alleviate the hunt for assets is to create a list of your assets and their location so that your executor can find them when it's time to administer your estate. Along with that list of assets, it's also important that your executor know who to contact. A few years ago, working with my friend who's a financial advisor, we created the My Personal Planning Essentials checklist that we make sure all of our clients have. It puts those important people and information all in one place for your executor to use when dealing with your estate.
Not Sure If You Need An Estate Plan?
If you already have an estate plan, you're ahead of many folks who haven't taken that first step to getting their plan assembled. But maybe you aren't sure if you need an estate plan or if your current one needs to be updated? You can click here for a quick Estate Planning Check Up - it's only 10 questions (and they are all multiple choice) and takes about 2 minutes to complete.
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- Estate Tax: Is It Time to Worry?
Next Steps
If you're ready to stop leaving an egg hunt for your family, or if you need a quick review and update of your current estate plan, let's set up a Legal Strategy Session and review the best options for you.
