E-C Answer: Well it depends if you’ve done the appropriate planning. Unfortunately, one of the least addressed, and most important issues of financial planning is estate planning. Whether you’ve amassed a multi-million dollar net worth or are just beginning to build an investment portfolio, we all have assets (stuff) that will be distributed when we die. One of the first areas of planning we discuss and review with new clients is this extremely important issue of estate planning. More often than not, what we find is that little or no planning has been done to assure that assets will be properly distributed and minor children cared for should the client pass away.
Everyday, countless people die without having even the most basic estate planning documents in place. In a case where the deceased did not have a will, for example, it’s left to the state courts to decide how the assets are distributed. Although the rules are different from state to state, the reality is that not all of your assets will simply pass to your spouse and children automatically. Having a will in place is extremely important.
For those of us that have young children, the need for estate planning only increases. Wouldn’t you rather decide now who will be the caregiver of your children rather than leave it to the court to decide should you be unable? For many, choosing a guardian is the hardest part and takes significant thought and discussion, but don’t let it be a reason to delay the process.
What happens if you become disabled and are unable to make decisions on your own? This is where the need for a medical directive and a durable power of attorney come into play. These are separate documents from your will but just as important. If, for example, you were to become disabled, there are still decisions and responsibilities that would need to be made on your behalf. Having a trusted friend or family member identified, equipped, and authorized to make those important decisions is crucial.
One of the most difficult decisions you need to make is how you would like to be treated should you be so severely injured that you can only be kept alive through medical assistance (life support). Having a medical directive in place gives the person you’ve designated the responsibility and authority to act on your behalf, as you’ve directed them. Spending the time to think through and decide what you would want done in this situation can save those you love a lot of grief.
There are a number of different estate planning tools that can be applied to your unique situation. For those with more complex estates, this can be a longer process. For those simply needing the most basic “emergency documents”, it might only take an hour or two. Either way, it’s an important component of a well-crafted, comprehensive financial plan.
By taking the time, energy, and resources to complete the appropriate estate planning, you are making an investment in the lives of the people and causes you care about most. Without the proper planning, it can lead to months and months, if not years, contending with probate court. Not only can this be an emotionally taxing process for all involved but is comes with unnecessary legal fees and public exposure. Yes, the probate process is open to the public.
If you haven’t done the proper planning or need to review and update your current plan, feel free to give us a call. We’re happy to help you consider your options and put you in touch with a trusted estate planning attorney.