A lot of Financial Zen members are currently going through the estate planning process with us and our favorite Bay Area estate attorney – Jennifer Jaynes.
To get you warmed up, below is a checklist of the decisions you’ll need to make to create yours.
(Don’t worry – these decisions are the hardest part.)
(By the way, if you don’t have an estate plan or aren’t in the process of putting one together, read this first – Do You Need an Estate Plan?)
Even after signing and dating your estate plan, your decisions are not permanent.
It can be amended at a minimal cost, and we’ll review it every 5 years to ensure it remains accurate and up-to-date.
Point being – don’t get paralyzed coming up with the perfect answer. Answer the best you can, and you can update it later if you need to.
Guardianship & Trust Distribution
Scenario: You and your spouse go down in the same plane while the kids are staying with grandma/grandpa.
- Guardians – Who will care for your kids? You need to designate a primary and a back-up (as many as you’d like).
- Trustees – Who will manage your money for the kids? You need a primary and back-ups (as many as you’d like). This is often the same person as the guardian, but doesn’t have to be.
- Beneficiaries – Who would get your money? Your kids? Other family? Charities?
- Distribution & Timing – How much would each beneficiary receive and when? For example, your kids get $100,000 for a wedding at 28, $200,000 for a down payment at 33 and the rest at 38 to help fund your grandkids’ college. The only limit is your creativity.
- Final Instructions – Cremation or burial? Location? Celebration of life party? (It’s your funeral, so have fun with it!)
Incapacity
Scenario: You’re hit by a bus, but don’t die. You’re in a vegetative state, unable to make your own decisions.
- Healthcare Power of Attorney – Who would make decisions about your healthcare? You need to designate a primary (usually your spouse) and a back-up (as many as you’d like). You need two lists, one for each spouse.
- Financial Power of Attorney – Who would make decisions about your money. These are often the same people you designate for Healthcare POA’s, but don’t have to be.
- Advanced Medical Directive – If your condition is terminal, do you want to be kept on life support or yank that plug?
Last Step:
After making these decisions, talk to the people you’d like to designate. They can turn down the responsibility if/when the time comes.
Better to have those conversations now. (We’d be happy to be a part of that conversation to explain their responsibilities. Just let us know!)
An estate plan is one of the most important pieces of your financial health, but it’s also the most overlooked (and therefore undone).
Make sure you have one. It’s not for you. It’s for the loved ones you’d leave behind.
