When you hear the words estate planning, you might immediately think of a big, overwhelming task that will cost too much money and take too much time. Those two misconceptions alone are often enough to keep people from getting started.
Let’s be honest. None of us enjoy talking about end-of-life planning. It’s uncomfortable, emotional, and just plain unpleasant. But when you remove the fear, estate planning is really one final way of taking care of the people you love.
After working with families for years, I’ve found that estate planning is much less about your assets and much more about the people you love. My clients are wonderful about naming beneficiaries on their accounts and talking through their hopes for their loved ones and the legacy they want to leave behind. But it’s taking that next step by putting those wishes in writing that too often gets overlooked.
I often tell my clients that estate planning is one of the greatest gifts you can give your family, but it’s hard to understand why until you understand what estate planning actually does for the people you leave behind.
I often ask clients a simple question: If something happens to you tomorrow, would your family know the answers to these basic questions?
- Where are your important documents?
- Who is responsible for making financial or healthcare decisions? Does that person know your wishes?
- What would you want for your family? Have you expressed those desires to your loved ones?
- What assets that you own would go through probate? Do you know how much time and money probate will cost your loved ones?
For many people, the answer is, “No,” or “I’m not sure.” And that’s exactly why estate planning matters, but it can feel overwhelming. So, where do you even begin?
Before I ever send clients to meet with an estate planning attorney, we usually start with a simple conversation. We spend less time talking about legal documents and more time talking about the people, causes, and values that matter most to them.
You can start by asking yourself a few simple questions:
- Who are the people or charities that are the most important to me? Which ones need my help the most?
- Do I want to gift more during my lifetime, or after I have passed? Do I have a financial plan in place that allows me to gift with clarity?
- Who would make financial and healthcare decisions if I couldn’t? Do I think they would be willing to take that on?
- If you already have an estate plan, have any of your financial or family circumstances changed?
Once clients have answered those questions, they walk into their meeting with the attorney with greater confidence because they know their “why” or their “True North.” The legal documents at that point simply become the tool that makes those wishes a reality.
The answers to those questions can help determine what type of planning is needed. Not every situation needs a full trust, but it’s important to understand what a will, a trust, and simple beneficiary designations each accomplish. Most of my clients are focused on the financial gift they will leave their children, but that’s not the greatest thing they can leave. The greatest gift is clarity. I often joke with my clients that family cabins are why estate planning attorneys exist. People laugh because we’ve all heard horror stories about what happens when someone passes without a plan.
When people think about estate planning, they often picture their loved ones receiving an inheritance. Very few picture their family searching through filing cabinets, hiring attorneys unexpectedly, or trying to guess what they would have wanted or why they made the decisions they did. In my experience, families don’t argue as much over money as they do misunderstandings or lack of clarity.
Even when decisions seem to make sense to the person leaving the assets, they do not always translate well. Families are far more likely to accept unequal distribution of assets when they understand the reasoning behind it. Some people are comfortable having those conversations with their loved ones before death; others prefer to leave a letter. That decision can become clearer as you build your plan. You know your family best.
Estate planning is not just about after you pass; it is also about protecting your wishes during your lifetime. If an illness, accident, or mental decline leaves you unable to make decisions, you may need someone to step in on your behalf to pay bills, access accounts, or express your wishes to doctors. Without a proper plan in place, this becomes extremely difficult, if not impossible. That extra stress isn’t needed during an already stressful time.
As a financial advisor, I often check in with clients to review their plan to make sure it still fits their needs and wishes. An estate plan is not something you create and tuck away. Life changes, and your plan should change with it. We also review beneficiary designations, account ownership, and how your financial accounts work alongside your estate plan, so everything is coordinated.
In the end, estate planning isn’t really about the money you leave behind. It’s about the people and causes you choose to leave it to.
