The events of the past few years have made it clear that we have no way of knowing, or controlling, what the future holds. And while that uncertainty can be uncomfortable, even frightening, you can take back some control by putting measures in place to prepare yourself and your family for the unexpected.
A survey conducted by Caring.com in December 2021 revealed that while more young people are likely to have a will now than ever before, middle-aged and older adults are actually less likely to have a will than they were in 2020.
Imagine if you suddenly fell ill and couldn’t communicate your wishes to your spouse or children. How would they know what to do? What would happen to the assets you’ve worked to save for them if you passed away without a last will and testament?
Failing to plan for the future only sets you and your family up for more confusion and anguish during an already stressful time.
The truth is, everyone, regardless of age, should have an estate plan. An estate plan helps to ensure that your wishes are carried out for you and your family in the event of your illness or death.
Estate planning can be complicated, but it doesn’t have to be. Odyssey Group Wealth Advisors works with you throughout your financial journey to make sure estate planning is part of your overall financial picture.
We’ll help you implement the key components of a comprehensive estate plan, including:
A last will and testament (will) is a legal document that designates how to manage assets upon your death. It typically includes the transfer of guardianship of minor children or pets as well as any specific instructions for their care. Wills and trusts can be used on their own or together.
A trust is a privately handled legal document that assures your heirs do not have to go through probate. It accomplishes the same thing as a will, along with appointing a trustee to carry out your wishes. With trusts, you have greater control and can outline specific rules or conditions for how assets will be distributed. For instance, if parents want their children to inherit income only at certain times, or need to appoint someone to look after a child with special needs, these things can be accomplished through a trust. Trusts can also take effect before you pass away, which means you can serve as your own trustee while you’re alive, then appoint someone else to take over after your passing.
3. Durable Powers of Attorney
A power of attorney authorizes someone you designate to handle certain matters on your behalf, such as finances or health care. When power of attorney is made durable, it remains intact if you cannot make decisions for yourself.
It’s also a good idea to have backup powers of attorney in case your first choice is unable or unwilling to act.
4. Beneficiary Forms
Wills and trusts are not the only tools available to protect your financial legacy. You should also designate beneficiaries to all your various financial accounts — including bank, brokerage and retirement accounts, and life insurance policies. This allows you to pass along assets outside of a will.
Be sure to keep them up to date! Beneficiary forms supersede wills, which means that your assets with beneficiary designations get excluded from the estate by default. To avoid conflict, it’s important to make sure that the language of your will aligns with all of your beneficiary designations. So if your situation changes through divorce, remarriage or the death of a beneficiary, be sure to update your beneficiaries as soon as the changes occur to ensure that your wishes are followed.
5. A Living Will
A living will, also called a directive to physicians or advance directive, is a document that lets you state your wishes for end-of-life medical care, in the event that you become unable to communicate your decisions. Not to be confused with a will, a living will has no power after death.
To be valid, a living will must meet state requirements regarding notarization or witnesses. A living will can be revoked at any time.
6. A Letter of Intent
A letter of intent doesn’t replace a will or trust because it’s not a legally binding document. It’s a supplemental document that provides an overview of your wishes for your assets and your family after your death, as well as any details you want to note for your funeral or burial.
You don’t have to face estate planning alone. Your Odyssey advisor will help you understand exactly why you need an estate plan, listen to your unique needs and concerns, and explain why you might also want to consider hiring an estate planning attorney.
You should also include your family, especially your beneficiaries, in your estate planning conversations. It’s critical for them to understand what should happen in the event of your illness, incapacitation or death. Those aren’t necessarily comfortable conversations to have, but preparing your family will go a long way toward alleviating uncertainty and confusion about the future.
Importantly, once all of your estate planning documents are in order, don’t set them aside and forget about them. The decisions you make now for your assets and your health might change over time, or with major life events. Check in on your estate plan periodically to make sure it continues to reflect your current wishes and values.
Still have questions on how to plan for the future? Reach out to talk to our team today.