BETTER TOGETHER: PART 3 - Estate Planning
After beginning the financial planning process with The Johnston Group, my husband and I had our list of things to do. One of the items at the top of this list was to put estate documents in place. We have been married with young children for almost a decade and apparently these are the basic documents that responsible adults should have already executed – a while ago! This included drafting and signing a Will, Power of Attorneyand a Health Care Directive. Most people I know shudder when they hear these words, so let me try to explain them in a way that will help you better understand their importance and significance.
First of all, it’s important understand that estate planning is for everyone! It’s not just for wealthy families or older individuals approaching end-of-life decisions. Regardless of size, everyone has an estate (home, car, personal property, jewelry, bank accounts, etc.). This requires planning – even if it’s very basic planning. At the end of the day, estate planning is simply the opportunity to exercise control over your assets (and children) in the event of your death or incapacitation.
Ideally, I would have drafted these documents a long time ago - like after our first child! - but remember, progress - not perfection!
Here’s my brief overview of the basic estate planning documents:
The will is the most important document for us because it allows us to name guardians for our children, decide how our money should be allocated for their care and also provides the opportunity make special gifts or donations following our deaths. This does not need to be a complicated document, but simply a legal piece of paper that instructs what happens to everything following your death.
Putting a will in place is important because it allows you to exercise control and care for your loved ones beyond your life. It’s also important because having a will makes life a lot easier for your family members and beneficiaries upon your death. Without getting into too much detail, the absence of a will can leads to unpleasant custody battles, arguments over who receives your property and can even lead to a long, lengthy public process (called probate) that decides all of this for you. The state legal system and surviving family are forced to spend a painful amount of money and time cleaning up this mess and, most importantly, would also have to decide how to move forward and care for young children left behind.
I know no one wants to think about this happening but it does happen! We know it can happen to anyone and when we put ourselves in our family’s shoes, I think it's easy to see how proactively laying out our wishes in a Will can save so much pain and agony for those we leave behind.
Through the work we do at The Johnston Group, I have seen families who have done an excellent job being proactive and getting a Will and estate documents in place and when they have passed unexpectedly, it has been a smooth and simple process because they had everything organized for their kids - allowing them to spend their time coming together as siblings to support one another instead of arguing, fighting or disagreeing on what each individual "thought" their parents’ wishes would be.
Now...my next two explanations will be much shorter...I promise.
Health Care Directive
A Health Care Directive is a legal document that allows you to:
- Provide information on the care you’d like to receive when incapacitated and
- Who can speak on your behalf in these situations.
For example, if I am incapacitated and would like my husband to speak for me (and he is unable to do so), this allows me to name my mother as someone else who can make health care decisions for me. This makes it easy for my family to quickly step in to make decisions on my behalf and they already have a record and file of my wishes so that they do not have the added weight of making big decisions blindly during a stressful and emotional time.
Power of Attorney
A Power of Attorney is a legal document where I am signing off that if I’m unable to be reached … example would be that I am out of the country traveling or lost in the woods (tends to happen 😉) and my husband needs to act or respond to something on my behalf. With this Power of Attorney he is already set-up to do this!
So, there you go! That’s what I learned about estate planning and what we set in place for our family!
My first realization upon signing our estate documents is that the process isn’t bad at all ( it took 2 meetings over the course of a month ) and I now feel SO MUCH RELIEF that I have these in place. Now my husband and I are real adults! Kind of kidding - but kind of not - because it honestly feels like such a relief to know we had all of those tough conversations that are easy to avoid and we now have a plan or road map for our kids and family to follow in the event that anything happens to us.
Have you put these documents in place? If not, what’s stopping you? I’d love to know and I bet I can relate.