The B.E.N.E.F.I.T. of Estate Planning

Estate planning can offer your family a gift of clarity and peace during a challenging time. It’s not just for the wealthy; it’s for everyone. While it might seem overwhelming, even a simple plan offers significant benefits. The key components of an estate plan can be remembered with the acronym B.E.N.E.F.I.T. Here is a breakdown of each element:

Be in Control with a Will: A last will and testament is a legal document that outlines your wishes for asset distribution after your death. It names an executor to handle the probate process and specifies who inherits your belongings. Without a will, the state will determine how your assets are distributed according to their laws of intestacy, which may not align with your wishes.

Establish Beneficiaries: Beneficiary designations allow you to specify who inherits assets held outside of your will, such as retirement accounts or life insurance policies. Beneficiaries can be individuals, trusts, or charities. If there is a discrepancy between your will and your beneficiary designations, the beneficiary designation takes precedence for that specific asset.

Name Your Power of Attorney: A Power of Attorney document grants someone you trust the legal authority to manage your finances and healthcare decisions if you become incapacitated. Separate Powers of Attorney documents can be created to address specific issues such as finances, childcare, and pet care.

Establish Your Healthcare Directive: To specify your wishes for medical care if you cannot decide for yourself, you’ll want to establish your healthcare directive, which includes a Living Will and Medical Power of Attorney. A Living Will outlines your preferences for life support and a Medical Power of Attorney appoints someone to make healthcare decisions on your behalf.

Form a Trust: A living trust is a legal entity that holds assets and distributes them according to your instructions. Living trusts can help avoid probate court, potentially saving time and money for your loved ones. Revocable living trusts allow you to retain control and make changes throughout your life. Irrevocable trusts offer some tax benefits but surrender control of the transferred assets. Living trusts can be more complex than wills, so careful planning and legal guidance are often needed.

Inventory and Compile Documents: While not a legal document, creating an inventory of your assets and keeping important documents (will, power of attorney, etc.) organized and easily accessible can be incredibly helpful for your executor in managing your estate. If you use a password manager, consider appointing a trusted loved one as an emergency contact to provide legacy access to your accounts.

Timely Reviews and Updates: Life circumstances change, reviewing and updating your estate plan at least every 3-5 years ensures that it reflects your current wishes. Review it immediately if you are moving, have health changes, have children, or have marital status changes.

By taking proactive estate planning steps now, you can ensure your wishes are followed, minimize emotional and financial burdens on your loved ones, and leave a lasting legacy.

Information in this material is for general information only and not intended as investment, tax, or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision. Email me your questions at info@financialfreedomwmg.com or call/text 458.777.4458.  You can also post your question on our Facebook page: https://www.facebook.com/FinancialFreedomWealthManagementGroup or find us on Instagram @financialfreedomwmg.