Estate planning is hard. Of course, the documents can be confusing. And the thought of visiting a lawyer’s office is usually less than appealing.
But the real difficulty in estate planning is emotional. Thinking about illness and death, planning for a time when we will no longer be capable or will no longer be on this earth is hard.
Estate planning is emotionally difficult, but it does not have to be overwhelming. By using a simple three-step process, you easily can create the framework for your entire estate plan.
First, start by making three columns on a blank sheet of paper. In the first column, write the word ‘health’ and ‘money’ in the second row. In the second column, next to ‘health,’ jot down the name or one or two individuals to whom you would talk about your health and doctor’s visits, and who would be willing and able to take you to medical appointments. If you are married, this is likely your spouse. For unmarried individuals, this may be an adult child, a sibling or a close friend.
After you have listed the people you feel most comfortable with, use the third column to list one or two alternatives. These will serve as backups for your first choice agent.
Moving to the second row, close your eyes and immediately think of the person you trust the most with money management and organization. If you do not have anyone you feel confident about money management, consider the person you believe who would at least pay bills on time. In the third column, list one or two alternative individuals.
The second step is even easier. Once again, start by outlining a simple chart with three columns. In the first row of the first column, write the word ‘Residuary,’ and in the second row of the first column, write the word ‘Specific.’
Moving to the second column, in the ‘Residuary’ row, list each person to whom you would like to leave a percentage of your total estate — not specific items. If you are married, your spouse may be the only person in this second column. In the third column of the same row, list the people to whom you would like to give property if the first person was unable to receive the property. This may be your children, grandchildren, siblings or even charities.
In the second column of the ‘Specific’ row, list people to whom you would like to leave a piece of personal property — some type of memento. You may know what that item would be, or know only that you would like to leave something to be decided later.
Next to each name, make a checkmark if you would want their children to receive whatever you leave to them, or if the gift should merely lapse if the individual is no longer living at the time of distribution. Leave the third column blank.
You now have completed your list of beneficiaries. Although you will need to return to this list when you do your complete planning, this will provide you with a starting point of who should be included.
Finally, jot down questions and concerns you have about the future. This is a great place to write down concerns about how to pay for future long-term care needs, protecting a disabled child or slowing down distributions to beneficiaries. Your estate planning attorney will structure your estate plan to meet your goals and concerns.
Estate planning always should be intentional. By utilizing a simple three-step planning process at home, you can ensure that your estate plan will be executed smoothly and according to your goals.