Estate Planning: What’s Love Got To Do With It?
From Valentine’s Day to American Heart Month, February has long been associated with love. That makes this month a great time to demonstrate how much you care about the people you love by putting an estate plan in place. If you already have one, now may be a good time to update your plan if it’s been a while since you reviewed it with your professional advisors.
While the pandemic has spurred increased interest in estate planning, according to a 2021 Gallup poll, fewer than 46% of U.S. adults have a will, which governs the disposition of your financial assets and property following your death. Based on the survey, Americans aged 65 and older are the most likely to have a will, with just over three-quarters saying they have one. Without a will, you are leaving important decisions about the disposition of your assets and the guardianship of your minor children to a court to decide.
In a separate survey, Gallup found that roughly the same percentage of U.S. adults have a living will. Living wills specify people’s preferences for medical treatment in the event they are unable to communicate those in the future. The same survey asked respondents about their own experience with end-of-life issues, with 25% of U.S. adults saying they have been in a situation in which they had to make a decision about whether to remove life support for a family member. Those who found themselves in a position to decide on end-of-life care for a loved one were significantly more likely to have a living will themselves.
What’s love got to do with it?
Think of your estate plan as a love letter to those you care about most. It provides a road map so loved ones aren’t left guessing what you would want during your lifetime if you became incapacitated, and after you’re gone. Without a plan in place, relatives can be left scrambling during a highly stressful and emotional time, trying to determine your intentions. That can prove costly, time consuming and chaotic for everyone involved. Thoughtful estate planning can alleviate much of this stress by helping to:
- Protect your legacy
- Provide for your dependents and heirs
- Shape the future of the organizations, causes and communities you care about
- Avoid costly mistakes
- Allow loved ones to focus on grieving and healing
- Replace uncertainty with confidence
Where do you begin?
The foundation of your estate plan is a Last Will and Testament. A will is a legal document that directs what happens to your stuff, who will handle your property (your executor) and what happens to your minor children by naming a guardian to take care of them. You also need a durable power of attorney (POA), which allows you to appoint someone to act on your behalf in the event you are unable to make important legal, financial or healthcare decisions on your own during your lifetime.
Your legacy is much more than your assets. Your personal values, life experiences, impact on others and belief system are all important components of your legacy. As a result, your estate plan should be a reflection of the legacy you want to leave. That involves communicating important information and details that may not be included in your will or trust through a letter of instruction to those you love. While this is not a legal document, it helps to outline your wishes and provide clarity, saving your heirs time, effort, and expense as they administer your estate.
A letter of instruction can be used to help document:
- Your preferences should you require long-term care, such as a desire to remain in your home with qualified nursing care.
- End-of-life or palliative care preferences that are not already outlined in your living will.
- Celebration of life preferences (funeral, burial and/or memorial services), including the type and location of services (religious, nonreligious), music, etc.
- Your digital presence, including online financial, ecommerce, and social media accounts that a trusted loved one or your executor may need to close on your behalf.
- Items with sentimental value to you or a loved one. Maybe you have property that is not specifically documented in your will that has greater sentimental than monetary value that you want distributed to certain family members or friends, such as photo albums, family recipes, books, trophies or awards.
- Certain high-value items. Don’t assume family members are aware of the value of property you may own, such as certain jewelry, collectibles or antiques. Take photos and provide any relevant information regarding the origin and recent appraised or estimated value of items, if known. Also note if items such as jewelry, artwork, coins or other valuables are insured under separate policies, outside of your current homeowners’ or renters’ insurance policy.
- The location of important estate, legal and financial planning documents, including your will, POA and trust documents; life insurance policies; deeds to real estate; information on any safe deposit boxes; and financial accounts, including retirement plans, credit cards, mortgages, loans, etc.
While crafting a clear and detailed “love” letter of instruction may seem a little daunting at first, remember, you don’t have to complete it all in one sitting. However, the more information you gather now, the easier it will be for loved ones to carry out your wishes later.
Whether you’ve been waiting to put an estate plan in place or have one but haven‘t formally reviewed it with your advisors for several years, our estate planning checklist can help you start the process and tick those important boxes along the way.
Read more related articles at:
Also, read one of our previous Blogs at:
Click here to check out our On Demand Video about Estate Planning.
Click here for a short informative video from our own Attorney Bill O’Leary.