Most of us spend a great deal of time thinking about how to organize our finances, build wealth, and manage our assets in the present. However, it’s equally important to create a plan for the end of our lives. While it’s not always the most pleasant topic to consider, determining how you’ll pass on your estate is an important piece of your legacy.
The term “estate planning” might conjure up images of vacation properties and luxury yachts, but in reality, almost every adult has an estate of some kind. If you own property or vehicles, or you have accrued any kind of savings over the course of your life so far, you have an estate – which means it’s wise to have an estate plan to go along with it.
Many people mistakenly believe that a last will and testament and an estate plan are one and the same. In actuality, a will is just one piece of a comprehensive estate plan.
What is a will?
Simply put, a will is a legal document that outlines your wishes for your assets after your death. In your will, you will name beneficiaries for your assets, which typically include:
- Cash
- Savings and investment accounts
- Real estate
- Items of personal value
If you have children under the age of 18, your will should also designate their guardian. A will can save your loved ones lots of time and effort after you die. It can also ensure that your assets end up in the right hands. Without a will, your state laws will determine where assets land.
A will is an essential piece of any estate plan, but adding other legal elements can make a difficult season easier for your loved ones. If you already have a will, you may want to speak with a legal professional about crafting a more comprehensive estate plan.
What is estate planning?
Every estate plan includes a last will and testament, but there are several other tools that can help you allocate your assets, including trusts, powers of attorney, and advance health directives. Your legal professional can help you determine how to execute each of these documents.
Trusts
A will gives directions to your executor regarding your assets. Since your will is considered a legal agreement, think of a trust as its financial counterpart. In the event of your death, a trust will transfer assets from you to the designated beneficiary of the trust. You may even benefit from establishing a trust now – they typically take effect as soon as they’re signed and funded, while wills don’t take effect until your death.
Powers of attorney
You may need someone to manage your financial and medical decisions if you become incapacitated during your lifetime. A power of attorney document allows you to choose a person (or multiple persons) to handle various aspects of your assets and make decisions on your behalf.
Advance health directives
Advance health directives are a subset of your power of attorney choices. They authorize someone to make medical decisions for you if you’re ever unable to do so yourself. You may want to create multiple powers of attorney for this reason — you might want a trusted family friend to act on your behalf in matters of finance or business, while choosing your spouse to make medical decisions.
Many estate plans also include a living will. This document states your wishes regarding life support and resuscitation. While it’s not a pleasant thing to consider, creating a living will can spare your family members from making incredibly difficult decisions in an already stressful time and ensure they honor your wishes.
A financial partner for life
At Marietta Wealth, we help our clients with investing, retirement, and financial planning. While we are not estate attorneys, we can assist in connecting you with the right professionals to ensure your estate is in good hands.
Our goal is to partner with you for the long term, creating a comprehensive financial plan that works in every season of your life. There’s nothing more comforting than peace of mind. While none of us know what tomorrow holds, we’d love to help you seek confidence and financial security for whatever lies ahead. Start your journey today with a Marietta Wealth advisor.
The information provided is for informational purposes only. It is not intended to be used, and should not be used, as the sole basis for legal and/or tax advice. Individuals should seek and rely upon the guidance and advice of their own legal and tax counsel before making any decisions regarding any planning, investment, tax concepts or strategies discussed herein. Individual circumstances may vary and results discussed are no guarantees of applicability or future performance.
Marietta Wealth is a registered investment adviser. Registration of an investment adviser does not imply any level of skill or training. For additional information about Marietta Wealth’s financial planning and advisory services, please see the Marietta Wealth Disclosure Brochure or ADV Part 2A for full details, which is available upon request or by visiting our website.