Talking about your estate plan is never easy. Trying to decide what to do with your money after death can be a difficult topic, and subsequently, many people may avoid it. But a carefully considered estate plan is a tremendous gift to loved ones, so it’s worth pushing past the discomfort and getting it done.
An estate plan includes a will or trust, power of attorney, and advance healthcare directive. These documents communicate your wishes to family at the end of life and after death.
My husband, Jason, and I realized that it had been so long since we’d updated our plan that we still had guardians listed for our kids — they are now both adults. So clearly it was time to schedule an appointment with our attorney and make some changes.
The process took us about 4 months from the initial meeting until we signed the final documents. During that time, we had several important topics to discuss. When you’re ready to update — or start — your estate plans, here are a few things to consider.
1. Who Will We Hire?
The first step in updating an estate plan is to hire an attorney with expertise in this area. We were fortunate to return to the attorney that handled my in-laws’ plans over 2 decades ago. He is kind, thorough, and always prompt in responding to our questions.
If you’re hiring an estate planning attorney for the first time, ask family and friends for a referral. Next, feel free to call their office and ask questions before getting started. Ask how much they charge and how long the process will take? Consider how helpful office staff are when you call and how prompt someone returns your calls or emails. This attorney may be a part of your family’s life for many years, so take the time to choose one you like and respect.
2. Who Will Be Our Executors?
An executor of estate is the person or persons responsible for following your wishes after you pass away. First, they will need to pay any outstanding debts or bills, and then they’ll need to be sure all assets are distributed as requested. It’s a big job and, therefore, choosing the executor is an important decision.
When our kids were young, we asked a trusted friend to be our executor. But now that our kids are 24 and 27, we decided they were capable of handling this responsibility. So with their approval, we added their names to our trust.
Take the time to carefully consider who you’ll ask to be your executor. Then get their permission to be added to your estate plans — nobody wants this to come as a surprise.
3. Who Will Receive Our Assets?
Deciding what to leave to your heirs is probably the biggest decision in estate planning. Your attorney will ask you to begin by listing all assets. This may include cash in bank accounts, stocks and bonds, and real estate. It could also include other valuables like jewelry, art, and cars. Jason has his own business, so this was added to our list of assets as well.
Next, you’ll need to select which of your heirs will receive these assets. When Jason or I die, all the assets will pass to the surviving spouse. After we both pass away, everything will be split 50/50 between our two kids.
But there are many options to consider. If you have grandchildren, you may opt to skip a generation and have your assets pass directly to them. If you don’t have kids, you could select nieces, nephews, or even friends to receive an inheritance.
4. How Will We Handle Items Of Sentimental Value?
If something is important to you, but not really an asset, you’ll still want to decide what to do with it. This might include jewelry, artwork, and family heirlooms. Our attorney gave us a document to list all of these items along with who should receive them after our death. This isn’t a part of any legal document and can change without involving your attorney, but it is an important step. And be sure it’s known where these items are. That dining room set of grandma’s might be in storage, so put that in writing as well.
5. Will We Leave Anything To Charity?
There are two charities that Jason and I have been supporting for a long time, so we decided that we’d leave them a legacy gift in our estate plans. If there’s a similar organization in your life, consider doing the same.
You have a few options for making this type of gift. You can allocate a percentage of your estate or determine a specific dollar amount. It’s even possible to leave a tangible asset like real estate, artwork, jewelry, or a car. I recommend discussing the best option with both your attorney and the charity of your choice.
6. How Will We Handle Tough Healthcare Decisions?
When you or your spouse become seriously ill, there may be difficult decisions to be made. The best time to discuss your options — and your preferences — are long before this happens. This is where an advance healthcare directive comes in. An advance directive is a legal document that explains how you want medical decisions to be made if you cannot make them yourself. It also identifies a person who can communicate on behalf of the sick person. Jason and I identified each other for this role, but it can be an adult child, another family member, or a friend.
7. Do You Need To Identify Guardians?
While Jason and I no longer need to select guardians for our kids, many people do need to consider this step for children and sometimes even grandchildren. Who in your life is willing and able to care for your children in the event of your death? There may be aunts and uncles and other family members who could fulfill this role. If family isn’t a possibility, then trusted friends might be willing. Whoever is selected and included in the estate plan, be sure they fully understand and accept this responsibility.
8. Does Everyone Understand Our Wishes?
After completing the estate planning process with our attorney, the final step was meeting with our kids. While movies often portray the reading of a will as a suspenseful and surprising event, in reality, you want the people you love most to know what to do after you die. They should fully understand their roles and responsibilities as well as how your assets will be divided. We also believe we are setting an example for our kids of how to openly and comfortably discuss estate planning. Hopefully, they will do the same some day with their own families.
9. Where Are All Our Important Documents Kept?
My father-in-law kept all important documents in an old and ugly briefcase. It wasn’t fancy, but it worked, and everyone in the family knew where to find it. I’ve heard stories over the years of friends frantically searching for important documents after the passing of their parents. This just adds stress to an already painful time.
In addition to your estate plan, you may have other important documents like life insurance policies. So decide where everything will be kept going forward and share that with relevant people like your executors and guardians. You may want to purchase a safe or locked, fireproof storage box. Renting a safety deposit box at the bank is another option.
10. When Should We Update Our Estate Plan Again?
Jason and I hope that our estate plan won’t need to be updated for many years. But we know that a variety of circumstances might necessitate it. Here are several to consider:
- Birth or death of anyone included in the plan
- Marriage or divorce of anyone included in the plan
- Acquisition, sale, or loss of significant assets like real estate, a business, or other high-value items
- Serious illness or disability of you or your spouse
- Changes in state or federal laws impacting any area of the plan
These circumstances won’t necessarily require an update to your estate plan, but they are points at which to review it. If the change has been significant enough, be sure to contact your attorney and get their opinion of how to proceed.
It’s important to note that most estate planning attorneys recommend reviewing your plan every 5 years even if none of the above circumstances apply. Spend a few hours re-reading the documents and be sure they still reflect your wishes.
Jason and I felt a sense of accomplishment after completing our estate plans. Not only do we have an updated plan that reflects our current situation, but our adult children now know about it as well. Along the way, we also reviewed and updated our life insurance policies. As frequent travelers, we can go anywhere in the world and know that our affairs are in order. That is a great feeling!