Your Blueprint for Estate Planning

About Tori Thurmond

Tori Thurmond combines her creative writing background with her marketing experience in her role as the Content Specialist at Brookdale. When she's not writing, she's probably spending time with her two cats or knitting.

The information is presented for general informational purposes and is not intended to constitute legal advice, services, or counsel to or on behalf of any person. This reading of this blog content does not form an attorney/client relationship with the presenter. Presenter does not represent any certification on the subject matter. Readers should refrain from acting on the basis of information in this blog without first seeking legal advice from counsel in your area.

Recently, we had the opportunity to sit down with attorney Amy Cross Nance to discuss the ins and outs of estate planning on our Great Full Life webcast series. During this session, we discussed what estate planning is, important estate planning terms to know and why everyone should create a plan of their own.

This blog is a high-level overview of an hour-long event. For more insight, make sure to check out the webcast recording here.

Estate-Planning Terms to Know

An estate plan is a plan to organize and manage one’s affairs and assets at death or in the event of mental incompetency. Your estate plan is a way you can outline your wishes and protect your family after you’re gone. A lot goes into estate planning, and it can feel like an overwhelming process, especially if you aren’t familiar with common estate planning terminology. Here are a few important estate planning terms that might help you get started:

Last Will and Testament

This is a document that states how to distribute your assets once you die. Your last will and testament typically also appoints an executor of your choosing to accomplish the distribution of your assets.

Revocable Trust

There are many types of trusts, but a revocable trust is generally considered to be the type of trust that essentially functions as an alternative approach to a will. Like a will, a revocable trust also states how to distribute your assets. While you’re living, you can transfer assets into the revocable trust, so that on the day that you die, you personally don’t own those assets, but your trust does. A successor trustee, which is synonymous with the executor of a will, is then responsible for carrying out the wishes in your trust.

Powers of Attorney

A power of attorney document is the document that you may need while you’re still living if you are unable to make decisions for yourself or need help handling your affairs. These documents are often equally as important as the will and trust. There are two types of a “power of attorney” document: financial and healthcare.

Financial Power of Attorney

This document legally appoints someone of your choosing to help pay bills, sell assets, or complete other financial tasks for you.

Healthcare Power of Attorney

A healthcare power of attorney appoints a person to make healthcare decisions on your behalf.

Advanced Healthcare Directives

Advanced healthcare directives are companion documents to a healthcare power of attorney. Alternately called “living wills” or “advanced care plans” depending on the state, these documents usually state your wishes regarding life-sustaining care like CPR, life support and other treatments. If you cannot make a decision for yourself regrading life-sustaining care in the moment, the person you’ve appointed in your advanced healthcare directive can make the decision on your behalf by referencing the advanced healthcare directive document.

Beneficiary Designation

A beneficiary designation is another alternative to a will or revocable trust regarding the transfer of assets. However, a beneficiary designation typically will override what may be written in a will. With a beneficiary designation, assets can be structured to automatically transfer at death, which can allow for an easier transfer of those assets. It’s important to make sure that your beneficiary designations and your wishes in your other documents are consistent to ensure your desired outcome.

Probate

Probate literally means, “prove the will.” The term is used to describe the process of a will being submitted to court. For a will to be effective, it must be submitted to court, approved as valid and the executor granted power. Depending on the state, the probate process can be relatively easy or more complicated. The best way to find out what your state’s probate process looks like is to talk to a legal professional in your state who can walk you through the process.

Choosing People You Trust

When arranging estate-planning documents, you’ll have to choose different people who you want to make decisions for you or manage your assets when you no longer can. These roles can include choosing an executor, a trustee and a guardian.

An executor typically handles estate administration, including gathering your assets, paying debts, selling any assets that need to be sold and making sure your heirs receive what they are supposed to as set out in your will, beneficiary designations or otherwise as determined by a court. A trustee manages assets that are held in a trust for the benefit of someone and makes discretionary decisions about distributions to that beneficiary. A guardian likely needs to be appointed if you have children who are minors. The guardian would take guardianship of your minor children if needed.

These roles are often filled by a family member or close friend, but each role can be filled by a professional. Cross Nance emphasized that the key to choosing an executor, trustee or guardian is trust. Make sure you can trust the people you appoint to these positions to carry out your wishes the way you intend. You might also want to consider different individual’s experience, skillset and availability when deciding who you would like to fill these roles in your estate planning.

Common Estate Planning Misconceptions

“Estate planning is just for the wealthy.”

Estate planning is for everyone! Every adult has assets, so everyone needs to have a plan detailing how they want those assets to be handled. Cross Nance pointed out that you already have an estate plan whether you know it or not, because each state has its own guidelines of how your estate will be handled if you don’t make your own specifications. Your state’s plans often won’t align with how you want your estate managed, so it’s important to take the time to arrange for your assets to be handled according to your own wishes.

“Estate planning is extremely difficult, time consuming and expensive.”

Although there are many elements to consider when it comes to estate planning, it’s a relatively straight-forward process. Cross Nance also points out that estate planning may not be as expensive as you think it is, though costs vary by state and the complexity of your estate.

Common Estate Planning Questions

When should you share your plans with your family?

While your estate plans are your private information and you don’t have to share them with anyone, it can be wise to let your family know what your plans are or even include them in some of the decision making. You don’t want to leave your family with any surprises when they’ll already be dealing with losing you. Including your trusted family members in your estate planning could allow you to care for them even after you’re gone.

What do you need to start creating an estate plan?

Start by determining your goals for your assets. Who do you want to leave things to? What assets do you have? What beneficiaries do you have in place? Think through higher-level questions like these, then sit down with a professional who can help you put a plan together.

How often should you revisit or update your estate plan?

Cross Nance recommends revisiting your estate plan once a year. This is a good time to evaluate if your wishes and circumstances are the same. Additionally, you might need to change some of your plans if any major life events occur, such as death of a family member, a birth, a marriage or the acquisition of new financial assets.

Estate planning can seem like an overwhelming task to tackle, but as Cross Nance voices, it’s not as scary as it seems. By taking care of your estate planning now, you’ll leave a legacy you’ll be proud of for your family and friends.

_{The above content is shared for educational and informational purposes only. The content is not intended to be a substitute for professional legal or financial advice or counseling from an attorney or financial advisor and should not be relied upon for making legal, financial or other decisions. Never disregard professional legal or financial advice or delay in seeking it because of something you have read on our site. Please consult your attorney or financial advisor before acting on any content on this website. Reference to any products, services, third parties or links to third-party websites does not constitute an endorsement, sponsorship, or recommendation of such products, services, or third parties by Brookdale or its affiliates.}