The Ultimate Estate Plan: Prep for Tomorrow, Today

Experts explain what an estate plan is, why you need one, and how to go about pulling one together.

By Cheryl Lock
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How to create an estate plan checklist

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As far as unpleasant topics go, deciding who would be in charge of your medical and financial decisions if you were incapacitated, and figuring out who gets what stuff when you pass, is high on the list. Nonetheless, estate planning is essential for anyone with loved ones they want to take care of when they’re gone. It's also an integral part of ensuring that you are taken care of in the way you would want if you were no longer able to make those choices on your own. 

Most Americans seem to understand the significance of certain elements of estate planning. According to statistics, 76 percent of us think having a Will — an essential estate planning document — is important. Unfortunately, only 40% of Americans actually have one. But creating a solid estate plan is about more than having a Will. Here's what you need to know.

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Estate Plan Terms You Need to Know

Since estate plan documents vary greatly from state to state, it’s important to get advice from an experienced local estate-planning attorney where you live for the specifics. Some of the basics, however, according to Kristin N.G. Dzialo, Esq., partner at Eckert Byrne LLCinclude:

  1. Will: The foundational element of any estate plan, a Will is a document that states who can deal with your individually owned assets, and directs who should receive those assets, upon your death. The Will may also establish guardians for children who are minors. (Double check with your state about the laws, but most refer to minors as children under 18 years of age.)
  2. A Revocable Living Trust: This is very similar to a Will, says Dzialo, except it is private and does not require court oversight in most states. Additionally, unlike other documents that are generally exclusive to either death or disability, the Revocable Trust exists under both circumstances. While people may have both, Dzialo always recommends a Will at minimum. This is especially true if you have young children since, in most states, the Will is where you must name the guardians of those children. 
  3. Non-binding instructional letters: These letters can be used to express your health-care decisions, memorial or funeral instructions, or provide additional instructions to guardians for your children who are minors. 
  4. Power of attorney: Appoints someone to make legal and financial powers on your behalf in the event of incapacity
  5. Health care proxy or Health care power of attorney: Appoints someone the ability to make your health care decisions if you cannot communicate them
  6. Living Will: This is an optional document that would direct the stopping of all life-prolonging procedures, like life support, if you were in a permanently vegetative state with no chance of recovery
  7. HIPAA authorization: Gives loved ones the ability to get access to medical information and records, speak to doctors and understand your needs

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Why You Need an Estate Plan

You are in the prime of life! Why on God’s green earth should you be worrying about this crap now? Well, in fact, you’re already late to the game. Dzialo recommends everyone over 18 have an estate plan. It’s about way more than where your wedding China will go. It’s also about “making sure only the people who know us best are in charge of making our personal health and medical care decisions, the way we’d want them to, at the end of our lives,” says Danielle G. Van Ess, a Massachusetts Wills, Trusts, and Estates lawyer at DGVE Law.

Not creating an estate plan could also mean putting your loved ones through a lot of unnecessary stress. “If you pass away without a basic estate plan, then your estate may be subject to death probate,” says Bishop Toups, an estate planning attorney with Daily & Toups in Florida. “Death probate is when your assets have to pass through your Will and go through a court-controlled process called probate. This is typically very expensive, time-consuming and stressful for your family.” Putting a solid estate plan together can help you not piss off (or financially ruin) loved ones after you die.

If that’s not enough to prove how important the proper estate plan is, consider this: What people ‘think’ the law is, typically is not what the law actually is, says Dzialo. “For example, in Massachusetts, if you are married without children, your parents could be partial beneficiaries of your estate, not just your spouse.” 

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How to Put One Together

The most common ways to put together an estate plan include:

  1. Work with a lawyer: Using a lawyer to draft your estate plan could cost between $300 and $1,200, according to Nolo, a site that enables you to tackle simple legal matters. But it’s also one of the best ways to ensure that everything is done legally and professionally, and that there will be no problems (in theory) when it comes time to actually put the estate plan to the test. “Until you have seen how these legal documents actually play out in real time, it’s impossible to fully appreciate the importance of doing this critically important work comprehensively and the right way,” says Van Ess.
  2. Create one online or with an app: There are plenty of online and app-based programs that promise to help you create estate plans, but they might not include all of the elements of a comprehensive estate plan. Some of these programs work directly with estate planning lawyers — LegalZoom, for example, offers a follow-up with a lawyer to answer specific questions for an additional fee — and what you pay will be dependent on which program you go with, and what package you decide to use. A bundle package at LegalZoom will cost you $179, but it includes a Financial Power of Attorney and Living Will, which the basic ($89) and comprehensive ($99) plans do not, as well as the opportunity to get attorney advice. At MeetFabric, customers can create a free will online directly from their smartphones — as well as look into life insurance options and other financial tools — but it doesn’t include the other important elements of an estate plan.
  3. Go the DIY route: If you decide to go this route, you’ll still need to get your Will notarized and finalized in accordance with your state laws, and you’ll probably want to have an estate planning lawyer check it over to ensure everything was done legally and will hold up in court.

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Estate Planning Dos and Don'ts

Whether you have an estate plan already or not, there are a few keys things to keep in mind about the process as a whole.

• Plan on regular check-ins. If you’ll be using a lawyer to help draft your estate plan, consider finding one you can see yourself working with for years to come. “A good estate-planning attorney will work with you over your lifetime to help develop your estate plan as your life changes and evolves,” says Shann M. Chaudhry, Esq., an estate planning and tax attorney. “We recommend check-ins annually, and thorough reviews every three to five years.”

• Think outside the boxDzialo says it’s important for people to think not only about the money or physical possessions they have, but also about their online presence. Things like Cryptocurrency, blog sites, social media, credit cards points or miles, online storage of photos — anything that’s part of your life online should also be included in your Will. “It is imperative that people take stock of all of their assets — physical and digital — to ensure that their loved ones have access to everything at their death,” she says. “Lock yourself out of your devices and ask yourself what you would be losing if you couldn’t ever log back in? How would those ‘assets’ affect your family?” 

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