Do I need an estate plan?

What does an estate plan mean to you? Many think estate planning is only meant for the wealthy or those in retirement. The truth is that, regardless of your net worth, family situation or age, an estate strategy can help provide you with control over your personal and financial life in a number of ways. 

In fact, it's never too early to put your estate plan in writing, including considerations for a will, trust, identifying beneficiaries and putting in place strategies for transferring wealth. Let's explore some of the key benefits of putting your estate plan in place as soon as possible. 

Why should I have an estate plan?

People avoid estate planning for many reasons: “I’m not wealthy, I’m too young, it’s too complicated, or simply, I don’t want to think about it.” By not putting your own plan in place, however, you have a “strategy” by default: the laws of your state. Without a proactive estate strategy, decisions about the care of your children, your assets and your health care may likely be controlled by state law and the courts. Every state has statutes dictating how assets will be passed after a person’s death, how to handle the decisions for an incapacitated person and how the court will select a legal guardian for your children.

Having an estate plan can help avoid these potentially devastating scenarios and, instead, help ensure that your family, financial and medical affairs are taken care of if something were to happen to you. A comprehensive strategy can offer you control over your financial life, as well as help to preserve and transfer assets according to your wishes while reducing delays and conflict due to unease among your beneficiaries. You'll also have the ability to appoint someone to make decisions on your behalf if you are unable. 

By working with a financial advisor and estate-planning attorney, you can create an estate strategy that aligns with your wishes for the future. Your financial advisor can remind you to regularly review and update your documents with your attorney and help ensure that your beneficiary designations match your intentions.

Key pieces of an estate plan

For some, an estate plan is as simple as a written will. For others, it can include several documents that work together to outline your wishes when it comes to finances and medical care — both during life and afterward.

So, what kind of plan is best for you? It all depends on what’s most important to you. Below are some quick facts on the common types of documents or strategies that you should discuss with your attorney.

• Will – A will provides direction for the distribution of your individually owned property and the care of any minor children after your death.
• Living trust – Assets you register into a revocable living trust can be managed by your named trustee if you become incapacitated. Your trust's assets will pass according to your named beneficiaries and may help avoid probate at your death.
• Health care power of attorney – This allows you to name a person or entity to make medical decisions on your behalf if you are unable to do so yourself (in cases of incapacity, etc.).
• Financial power of attorney – This allows you to name a person or entity to make financial decisions on your behalf if you are unable to do so yourself (in cases of incapacity, etc.).
• Medical directive – With a medical directive (sometimes called a health care or advanced directive), you can share your preferences on how you'd like your future medical care handled. This includes your wishes regarding life-prolonging care, certain medicines, etc.
• Beneficiary designations – Some types of assets, including investment and retirement accounts and insurance policies, allow you to designate a beneficiary to receive their proceeds at your death. These designations usually supersede your will or trust and can bypass probate.

It's important to note that while most people need a will, not everyone needs a trust. Each situation is unique. When making your decision, think about your age, wealth/assets, need for guardians and privacy concerns.

Communicating your strategy

Estate planning is about more than documenting your intentions for distribution purposes; it can also be a channel to communicate with current and future generations. Sharing your plan and the rationale behind it is a powerful way to pass on your values, purpose and vision for your legacy.

You should communicate (at a minimum) the roles and responsibilities to those you have named in a fiduciary capacity in your documents (such as agent under power of attorney, executor or trustee). It’s important those individuals are comfortable with and prepared for the duties you’re asking them to perform. The need to access estate, medical directive or incapacity planning documents often occurs suddenly. Communicating the location of assets, documents and passwords, as well as how to access them, keeps loved ones from guessing while grieving or during stressful times.

How Edward Jones can help

These decisions can be complex, which is why we believe a team approach is best. Your Edward Jones financial advisor can help walk you through the process, prioritize your goals and work to coordinate with your team of tax and legal professionals to help ensure your personal estate goals are met.