Why everyone needs an estate plan

When I was a kid and my dad would drop me off to meet friends he would always say "make good choices" as I was getting out of the car. 

When I was pregnant with our first child, my daughter, I had a- sit up in a panic, in the middle of the night, drenched in sweat, moment thinking about what would or could happen to her if my husband and I were no longer around. That "make good choices" phrase had suddenly taken on a whole new meaning. We met with an attorney shortly after that night and set about making plans should the unthinkable happen in our lives. 

What a terrible and uncomfortable conversation. Sitting in a lawyer's office talking about what we wanted for medical intervention, powers of attorney for medical, financial, where our kid(s) would go. What level of life insurance coverage we'd require to get our kids through college- the kid that was still hanging in hotel mama. I came into this conversation with a background working in hospitals, and seeing the horror shows firsthand that happen when these decisions aren't made by the person themselves. It was that little voice saying "who is going to know this stuff if you don't put it down" that nudged me along. We can make these decisions but they don't get you too far if no one knows or, worse, if they think they know and it's not what you want. 

I don't want my husband to have to make choices and wonder "what if" when it comes to medical decisions. I wanted the kids to be taken care of from all angles (care, medical, financial) because that's part of the b-side to parenting- making these decisions. In my career I have witnessed the mess that comes from lack of direction from parents. It creates conflict, aggressions, anger, and ultimately resentment. So while you're healthy (and of the right mind) make these choices- sit through the icky feeling meeting with an attorney to go through these documents. Set up your estate plan.

What is an estate plan? It sounds so daunting. At what point have you tipped the scales into having an "estate"? What are these documents?

[insert disclaimer: I'm not a lawyer so consult with one to figure out what the best option is for you and your family, it's worth the time and money]

I would highly recommend a trust. They are on the expensive side to set up but include the following: 

1. Will

2. Powers of attorney (POA)- healthcare, and financial

These documents are where you can be as broad or specific as you'd like in determining who has a say and (maybe more importantly) who doesn't. You decide who the beneficiary is/are and what that means for each person. There are clauses you can add- like if there is a substance abuse issue they lose access to funds, funds are specific to the individual recipient and cannot be considered as assets to divide in case of a divorce. Our lawyer explained it the best by saying, "it's like reaching back from beyond the grave and saying- this is exactly what I want to happen."

The other key component of this package is having a life insurance policy. There are different types of policies and it's best to discuss which is the best fit for your individual needs. You must, no matter which one you choose, have one that names the trust as the beneficiary in case something happens. The life insurance payout funds the trust and puts the financial wheels into motion, per your instructions.

An established trust is another way to avoid probate- the freezing of your assets while the estate is being settled. Once your trust is written and signed transferring your assets (bank accounts, vehicles, house, retirement accounts, etc) to the trust they are protected from the probate process. This is so the individuals you've named as trustees can access funds for your beneficiaries (ie. pay the utility bills, buy groceries, buy school supplies) instead of waiting months or years to access any funds. 

This is a very very brief example of some of the legal and financial considerations to make when planning for the future, whether it's for a new baby or simply making sure you have all your ducks in a row. Having these documents in place has given me piece of mind knowing that if something were to happen my wishes are explicitly known and not assumed. 

Connecting with a lawyer to discuss these documents is uncomfortable.

I get it.

These are big items to cross off your list.

Once they're done you can cross it off your list and not think about them unless some updating is necessary. 

Do this for your family.

Do this for you.