#358 The Basics Of Estate Planning

Who Needs Estate Planning?

Often when people hear estate planning, they think that it might not apply to them. They think because they don’t have a significant amount of net worth that it’s not something they need to investigate. However, everyone needs an estate plan regardless of your financial situation. Working with a well-trained and established estate planning attorney can give you a significant piece of mind not only over your financial affairs but your family affairs as well. If something were to ever happen to you unexpectedly there are a few documents that everyone needs, regardless of net worth or financial situation. The first thing everyone needs is a will. A will determines where and how your assets are handled in the event you pass away unexpectedly. Among many other things, a will also can contain provisions that would determine what would happen to a minor child if both guardians were to pass away unexpectedly. In addition to those child care provisions, a will can also allow you to create a trust to handle the assets that you leave behind to care for those minor children. A second document that we recommend is a health care directive. If you were to become incapacitated and wanted someone to handle your health care, these documents come in handy for those health care needs. Next, a living will is a document that explains what you want to be done related to your health care in certain situations. There’s also a document called a health care power of attorney or a health care proxy. This gives someone else that you trust the ability to make decisions on your health care if you are unable to make those decisions for yourself. Lastly, we recommend getting a financial power of attorney. It’s like the medical power of attorney but gives authority to someone you trust to make decisions related to your property and your financial accounts and other decisions if you are unable to make them for yourself. These are the main documents that we feel are most important for people to have in their estate plan. This is something that you need to prepare for no matter your age. Life changes which is a good reason to re-evaluate these topics every five or so years or as needed as your situation changes.

Beneficiary Designations

A few other key estate planning topics that everyone should also address are beneficiary designations. On accounts such as IRAs, 401ks, life insurance policies, annuities, and several other types of accounts you should have beneficiaries named. If something were to unexpectedly happen to you those assets would pass through the beneficiary designation that you appointed on those accounts. If your wills and the beneficiary designations on your accounts contradict one another, the assets will pass in accordance with the beneficiary designations and not the will. You want to make sure that the estate plan you put together in your will matches up with the beneficiary designations that you have listed on your accounts.

Document Access

One other common sense thing that I would like to mention that people often times overlook is to make sure that the people who will actually need and use your estate planning documents, such as your executor, the guardian of your children in your will, or any powers of attorney, actually know where your documents are located and can access them if they need to on your behalf. This is a very high-level discussion on estate planning and can be very complicated and very intricate based on your specific situation. These are items and topics that everyone, regardless of your situation, should address.


Jay McGowan, CFP®, CPA, PFS
Senior Vice President
Director of Financial Planning
Email Jay McGowan Here


Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

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