What is Estate Planning?
No one likes to think about their inevitable mortality but planning for it can help greatly reduce the stress, anxiety, and apprehension surrounding the death of you or a loved one. No matter how old you are, there is plenty of planning you can do right now to help ease the burden and lighten the impact of your death on those you love.
Broadly speaking, estate planning is the management and distribution of your financial and physical assets in the event of your death or medical incapacitation. More simply, estate planning is making a plan and leaving instructions for the people in your life you will leave behind upon death, or from whom you will need assistance in the event of your incapacity.
Estate planning is a process encompassing a number of legal, financial, and medical tasks and directives. Estate planning can provide instructions for your medical care should you become incapacitated, identify a guardian for your minor child(ren), and outline the transfer of your business if you die or become otherwise unable to manage it yourself. Estate planning ensures that the money and possessions you’ve accumulated and treasured throughout your life go to the people you want, and that your final wishes are carried out the way you want. Proper planning can also help relieve expenses for your loved ones when you die, such as debt or funeral-related expenses.
Why should I have an estate plan?
Estate planning sounds like fancy terminology for the wealthy and elite, but it’s actually for everyone. If you have any financial assets, physical possessions, or business ventures, you have an estate. The term “estate” can refer to anything you and your spouse or partner (if you have one) own and have built or earned throughout your life, such as your home or other property; bank accounts, including checking and savings accounts; life insurance; investments and retirement funds; vehicles; and other personal possessions.
When you die—and we all die—or if you become physically or mentally incapacitated, someone somewhere has to decide what to do with all of these assets. Things like property, bank accounts, and even child or dependent guardianship have to be handled legally, with proper written documentation and legal transfers, and that can get messy if there aren’t clear directions for what you want done with it. If you don’t articulate how you want your affairs handled, state law and probate courts will do it for you. For example:
- Any asset without a listed (living) beneficiary is frozen while it goes through the probate process, which can take months, or even years, plus money for legal fees and expenses.
- Without an appointed legal guardian or conservator, any children, dependents, or family members with special needs could become wards of the state with no access to your financial assets.
- If you haven’t named a representative to distribute your estate, one will be assigned, whether that is a surviving spouse, another close family member, or a public trustee.
All of this increases the probability that the decisions made about your estate will not reflect what you want, or what your family wants or needs. Making a plan now makes following your wishes easier for everyone else who’s left when you’re gone, or who are caring for you if you become incapacitated.
Estate planning also helps your family handle the practical aspects of your estate at a time when emotions are high and making sound, rational decisions is especially difficult. Leaving instructions—and ideally, discussing them before you die—can often help mitigate fighting and disagreements between remaining family members, business associates, or friends.
Our experienced team can help you navigate complicated family situations and discussions regarding death, incapacity, and your legal options for dealing with them.
What is in an Estate Plan?
While estate planning should be a fluid, ongoing process, regularly revised and updated as family, financial, and legal circumstances change, most plans should, at a minimum, include the following legal documentation:
Will. A will names the executor of your estate as well as a guardian or conservator for minor children or other dependents. It also details who inherits what. However, a will still needs to go through probate in the court system, takes some time to execute, and is a matter of public record.
Trust(s). A trust is similar to a will, designed to facilitate the transfer of property and possibly provide tax benefits for both you and your beneficiaries. However, unlike a will, a trust is handled privately by an appointed trustee (who you name) and avoids probate. During your lifetime, you are the trustee and decision-maker, and you designate successor trustees to handle your trust matters in the event of your death or incapacity.
Powers of Attorney. Powers of Attorney identify individuals to act on your behalf if you become unable to do so, such as making financial or medical decisions for you. These are typically set up as durable powers of attorney, which means they remain in effect until the principal (you) passes away or the document is revoked. A medical power of attorney often accompanies a health care directive.
Healthcare or medical directive. Also sometimes referred to as an advance directive or living will, a healthcare or medical directive is a legal document that specifies what kind of medical treatment you want or don’t want if you become incapacitated, and how you want medical decisions made regarding your health if you cannot do it yourself. It can help guide your loved ones and your medical team on how to navigate difficult situations like long-term care, resuscitation efforts, or even life support.
Beneficiary designation. Beneficiary designation names a person or persons who will receive money from financial assets like retirement accounts, annuities, life insurance policies, and other accounts. Naming a beneficiary makes the asset automatically “payable on death” so funds don’t have to go through probate and can go directly to the beneficiary. Beneficiary designation—which overrides a will—may be called transfer on death or payable on death form for non-retirement financial accounts.
What can I do right now to start my estate plan?
There is a lot that goes into estate planning, but the good news is, for most people, there are things you can start doing right now to get the proverbial ball rolling.
5 things you can do now to prepare your estate for the future:
Inventory your financial and physical assets and gather and organize your documents.
Figure out what your estate entails. Do you have physical assets like a home, land, mineral interests, or other real estate? Vehicles, valuable collectibles, or other priceless personal possessions? What kind of financial assets do you have, such as health savings accounts, retirement accounts, or other bank accounts? Begin gathering information on your retirement plans and debts (credit cards, loans, unpaid taxes, mortgages, etc.) or instructions for safe deposit boxes. Make lists, take pictures or videos. Know where important documents are, like your will or trust if you have one, insurance policies, real estate deeds, and certificates for stocks, bonds, and annuities, and make sure someone you trust also knows where they are. If you don’t have a will or trust, if you don’t have one set a target date to get these documents in place.
Account for the needs of those you’ll leave behind.
If you have young children or other dependents, figure out who could and would be able to care for them. Name a guardian and a backup guardian, and document your wishes for their care and raising. What kind of long-term financial support will they need? Also consider purchasing life insurance. Life insurance helps cover final expenses—such as funeral and related expenses—or expenses that are outstanding at the time of your death, such as debts or estate taxes, so the people you leave behind aren’t burdened with such expenses.
Review your beneficiaries.
Make sure all your investment accounts (401(k)s, IRAs, brokerage/bank accounts, etc.) have correct, living beneficiaries. Make sure the right people are listed, especially after a divorce or marriage, or if you’ve added a new child or children to your family (by birth or adoption). Name contingent beneficiaries where you can and don’t leave sections blank—anything without a named or designated beneficiary is subject to probate. And remember, when you have designated beneficiaries, those designations cause the asset or account to be distributed directly to the named beneficiary/ies outside of probate, so designations should be current and correct.
Start the conversation.
Perhaps the most important thing you can do for your family right now is to start the conversation with them about your inevitable death. While it may be uncomfortable at first, making a plan for what will happen when you die is ultimately an act of love for those you’ll leave behind. Conversations with family are important, whether you have one big sit-down “family meeting” or try small discussions as things come up. Either way, it is important to keep the conversation open. Whether or not you or your family want to talk about it or think about it, something will have to be done with your assets and possessions when you die, and all too often, family members are left picking up the pieces without any idea of what you wanted. If it’s not you and your family making the decisions, it will be the court, which, without your planning, has no information about (or interest in) your final wishes.
Talk with an estate planner.
You don’t have to be an expert in estate planning to get your final affairs in order. With years of education and experience, the team at the Law Office of Shannon D. Taylor understands the legalese and financial jargon and can help you and your family navigate the process.
Estate planning isn’t as much about you as it is about the people you love and making things easier for them in the event of your incapacity or death. We recommend that you review your plan with a qualified attorney at least every 5 years or in the event of a major life change, such as as marriage or divorce, birth or death of a child, death or incapacity of a spouse or beneficiary, death or incapacity of a named attorney-in-fact, designated guardian, or designated trustees or personal representative, and more.
Estate Planning Services in Oklahoma
Shannon D. Taylor is a family law attorney with nearly two decades of experience in estate planning and other family legal services. Shannon has been serving Oklahomans since 2005. She works diligently to ensure the legal rights and responsibilities of all families remain secure and protected, and has a special focus on meeting the unique legal needs of the LGBTQ+ community and same-sex families. Shannon and her team at the Law Office of Shannon D. Taylor provide estate planning services such as :
- Wills and living trusts
- Healthcare directives
- Financial powers of attorney and health care proxies
- Naming guardians for physical care and/or to protect and manage assets for minor children
- Naming your desired guardian in the event of your incapacity
- Making end-of-life arrangements
- Covering funeral expenses
- Probate and estate administration
- Property disputes and transfers
- All types of guardianship, whether for a minor child or an incapacitated adult, and whether seeking to obtain or defeat guardianship
Shannon and her team are dedicated to professional, compassionate, and empathetic legal representation for all families, and they will do everything necessary to advocate for you and your rights. Click here to contact the Law Office of Shannon D. Taylor today. You can also call 405-602-8446 or email her directly at email@example.com. Don’t wait another day to begin charting the future for your estate.
Disclaimer: This article is for informational purposes, and contains the opinions of the author based on information currently available at the time of publication. This article is written by an attorney, but it is not legal advice, nor does it create an attorney-client relationship. The contents of this article are true and accurate to the best of our knowledge, information, and belief, but there may be inadvertent omissions or mistakes. Use of this information without consulting a qualified professional is at your own risk. We would love to serve as your attorney but we do not and cannot represent you unless/until you have signed an Engagement Letter with our firm. You may contact us at 405-824-8565 or firstname.lastname@example.org.