Protecting Your Legacy

National Estate Planning Awareness Week

Creating wealth to support the lifestyle you want for yourself and your family is important. But what happens after you die? Isn’t it also important to create a legacy to pass on your wealth  to those you love and care for? This process involves careful planning and strategic decision-making to make sure that your hard-earned assets continue to benefit your family for generations to come.

Estate planning is the final frontier in this journey—what we call the 7th Money Milestone. It's the last critical step in helping to ensure that everything you've worked for secures your family’s future, providing peace of mind and stability even when you're no longer there to provide guidance.

National Estate Planning Awareness Week serves as a powerful reminder of the importance of taking this final step, solidifying the legacy you leave behind. It's an opportunity to review your plans, consult with professionals, and make sure your wishes are clearly documented and understood. Taking action now safeguards your family's future and honors the hard work and dedication that built your wealth.

Why Estate Planning is Essential for Everyone

Estate planning is not just for the wealthy. Whether you have a modest home or significant financial assets, creating an estate plan is vital to avoid unnecessary legal complications, family disputes, expenses and delays. It’s about making sure that your wishes are respected and your loved ones are taken care of according to your intentions. Supreme Court Justice Louis Brandeis once said, “The most important political office is that of the private citizen.” In estate planning, this rings true—taking control of your estate is your right and responsibility.

Without a plan, the state—not you—determines how your assets will be divided. This can lead to unintended consequences and costly, prolonged legal battles for your family. Imagine the stress and financial burden placed on your loved ones as they navigate through the complexities of probate courts and legal proceedings, potentially causing rifts in family relationships. Estate planning can safeguard your wealth, however large or small, so it reaches the hands you intend it to, providing peace of mind and clarity for both you and your family. Additionally, an estate plan can express your healthcare preferences and guardianship arrangements, offering a comprehensive approach to managing your personal affairs.

Who Needs an Estate Plan? (Spoiler: You Do)

Do you have a bank account, a home, or children? If so, then you need an estate plan. Life’s unpredictability demands that we prepare for the unforeseen, and an estate plan helps guarantee that your wishes will be honored even if you’re not present to provide direction.

An estate plan covers several crucial areas:

• Guardianship of your children – Who will raise them if you can’t? Specifying a guardian ensures that your children will be cared for by someone you trust, providing stability and continuity in their lives should anything happen to you or your partner.
• Healthcare decisions – Who will make decisions on your behalf if you’re incapacitated? With an advanced directive or healthcare proxy, you designate the person you trust to make medical decisions for you, reflecting your preferences and values when you cannot communicate them yourself.
• Asset distribution – How will your wealth, property, and possessions be distributed? If your children are minors, who will manage the financial aspects of their care? An estate plan allows you to specify how your assets should be managed and distributed, minimizing potential conflicts and confusion among your heirs and helping to ensure that your legacy is passed on in accordance with your wishes.

An estate plan provides peace of mind, knowing that no matter what happens, your affairs will be managed according to your intentions.

The Consequences of Failing to Plan

Without a plan in place, state law will take the reins and decide for you, regardless of your personal wishes or the unique dynamics of your family. Imagine the care of your children being left to a relative who may not share your values and aspirations for their future. Imagine the wealth and assets you worked so hard to accumulate ending up with a financially irresponsible adult child or an estranged relative.

The failure to put a plan in place may result in unnecessary taxes, unintended beneficiaries, or worse, tension and strife among your loved ones. Probate can be a lengthy and expensive process, sometimes taking years to settle estates. During this time, families are left to shoulder both emotional and financial burdens, causing unnecessary stress during an already difficult period.

Probate Nightmare:  I worked with a family to probate the estate of their beloved husband and father. He died suddenly in a freak car accident on their way to the grocery store on a Saturday afternoon. He had no Will for his wife and 2 young daughters. His only asset, other than the totaled car, was an investment account with around $35,000. The family desperately needed this money but the court could not distribute it until more than 2 years after his death. And, since he did not have a Will, the account was distributed equally among his wife and children. Since his daughters were minors, the court ordered that a guardian ad litem be appointed to monitor their share of the funds. The probate process and guardian ad litem fees ate away at the meager sum he left behind. If he had put a simple Will in place, or named his wife as the beneficiary, the funds would have been immediately distributed to his wife.

How to Take Action During National Estate Planning Awareness Week

National Estate Planning Awareness Week is a great opportunity to move forward in securing your financial future by addressing the 7th Money Milestone. Here's a guide to starting or enhancing your estate plan:

1. Assess Your Assets: Evaluate all your assets. This includes tangible items like real estate, vehicles, and family heirlooms and intangibles such as investment portfolios, retirement accounts, life insurance policies, and digital assets.
2. Choose Key Individuals: Select the right individuals for crucial roles. Consider who you trust to act as your executor, responsible for managing and distributing your estate according to your wishes. If you have children, designate guardians who will provide care and guidance until they are adults. Additionally, appoint decision-makers for healthcare and financial matters who are capable of making informed choices on your behalf if you become incapacitated.
3. Consult an Estate Planning Attorney: Online services can help provide a basic plan if you’re on a tight budget. If you need a more complicated plan and your budget allows, an experienced estate planning attorney can help you tailor your estate plan to fit your unique circumstances, especially if you have a blended family or a special needs child.

What Should Be in Your Estate Plan?

A complete estate plan includes the following components:

• Last Will and Testament: This vital document specifies how you want your assets to be distributed upon your passing. It allows you to designate beneficiaries for your possessions, from valuables to sentimental items. Additionally, it provides a mechanism to appoint guardians for your minor children, ensuring they are cared for by someone you trust.
• Power of Attorney: This legal instrument designates a trusted person to manage your financial affairs if you become unable to do so while you are living. This can include paying bills, managing investments, paying taxes, and handling other financial transactions.
• Advance Healthcare Directive: Also known as a living will, this document outlines your preferences for medical treatment if you are unable to communicate your decisions. It can include instructions on life-sustaining treatments, organ donation, and other important healthcare decisions.
• Revocable Living Trust: This flexible tool helps you manage your assets during your lifetime and beyond, allowing you to avoid the costly and lengthy probate process. A trust is especially important if you want to name beneficiaries who are minors, have special needs or live outside of the U.S. or if you own a business or real estate in multiple states. A living trust can be altered or revoked as long as you are alive and mentally competent, providing ongoing control over your financial legacy.

These essential tools give you control over your legacy and protect your family from potential disputes, legal hurdles, and unnecessary delays and expenses. By clearly outlining your wishes and appointing trusted individuals to act on your behalf, you can ensure a smoother transition and lessen the emotional and financial burden on your loved ones.

The Final Milestone: Secure Your Legacy

At WealthWave, we emphasize the importance of achieving the 7 Money Milestones—from helping to protect your income and financial security to building and preserving wealth. However, this journey remains incomplete without addressing the critical final milestone: estate planning. This is the stage where your years of hard work, careful protection, and financial independence truly come full circle.

By engaging in thoughtful estate planning, you ensure that your loved ones have the time and space they need to grieve, without being encumbered by complex financial or legal challenges. This final milestone allows you to provide for future generations while safeguarding the principles and priorities that define your life.

Call to Action: Take Control of Your Family’s Future Today

National Estate Planning Awareness Week isn’t just a reminder—it’s a call to take action for a more secure tomorrow. This is your opportunity to reflect on the importance of protecting what you’ve worked so hard to build throughout your life. By planning, you help provide a safety net for your loved ones.

If you haven’t completed all of the 7 Money Milestones yet, now is the perfect time to do so. These milestones serve as a comprehensive guide to financial security and can help you navigate through the complexities of estate planning.

Get started today. Reach out to your dedicated WealthWave financial professional, who can offer personalized guidance tailored to your unique financial situation. Additionally, consult with an experienced estate planning attorney to create a robust plan that focuses on the orderly transfer of assets and the designation of trusted friends or family members to care for your minor children and to carry out your wishes.

‍

Kim Scouller, Attorney and Certified Financial Educator^®

‍

Kim Scouller stands as a prominent legal voice in financial education, with more than 30 years as an attorney and financial professional. She is the co-author of "HowMoneyWorks for Women: Take Control or Lose It," alongside CPA Sharon Lechter of the “Rich Dad Poor Dad” series. Her vision to democratize financial literacy is becoming a reality with TheMoneyBooks series. In this article, we continue exploring the significance of estate planning, emphasizing its impact on your assets and your loved ones.

Crucially, estate planning is not reserved for the wealthy or the elderly. It's vital for everyone, regardless of age or income. This includes young families needing to designate guardianship and single individuals wishing to allocate their assets thoughtfully.

National Estate Planning Awareness Week serves as a reminder to take action and secure your family's future through thoughtful estate planning. Don't wait until it's too late—initiate the conversation with a WealthWave professional or consult an estate planning attorney today. Your legacy and your loved ones deserve it. As Kim wisely notes, "Estate planning isn't about fear; it's about freedom." Take this step and complete your 7 Money Milestones by securing your estate plan today.