Essential Estate Planning
“Let our advance worrying become our advance thinking and planning.”
Natural disasters and unexpected emergencies can come out of nowhere, creating chaos in our lives.
While we can't stop these events, we can ensure we're ready for them. A key part of that preparation is making sure our affairs are in order through estate planning.
What is an Estate Plan?
Simply stated, an estate plan is a legal document that allows us to protect what we care about most—our assets, our families, and our wishes—no matter what life throws our way.
An estate plan can include any combination of wills, powers of attorney and trust documents. I've outlined several of these options below and included ideas for keeping those documents in a safe place.
As you go through this list, keep in mind that in order for the court to uphold your document(s) (and thereby honor your wishes), you'll want to review and finalize these documents with an estate planning attorney.
Estate Planning Steps to Consider
1. Create or Update Your Will
Your will is the foundation of your estate plan. It ensures that your assets are distributed according to your wishes. In the event of a disaster, an updated will ensures that your loved ones are taken care of without unnecessary legal hurdles. Make it a habit to review and update your will regularly, especially after any major life events or significant financial changes.
2. Establish a Durable Power of Attorney
If something happens and you're unable to manage your affairs, a durable power of attorney allows someone you trust to handle financial and legal matters on your behalf. This can be essential in managing things like insurance claims or property decisions while you're recovering from an unexpected event.
3. Appoint a Health Care Proxy
A health care proxy, also known as a medical power of attorney, ensures someone can make medical decisions for you if you're incapacitated. In the chaos of a natural disaster, this can provide a level of security, knowing that your health care preferences will be respected and carried out by someone who understands your wishes.
4. Set Up a Living Trust
A living trust allows you to transfer assets into a trust for easier management. This can streamline the process for your beneficiaries, especially during times of crisis, and may help avoid the delays and complications of probate.
5. Ensure Beneficiary Designations Are Up-to-Date
For assets like retirement accounts or life insurance policies, keeping your beneficiary designations current is crucial. A quick review after any life changes can prevent complications down the road, ensuring your assets go directly to those you intend without the need for court involvement.
6. Plan for Digital Access
Today, much of our financial and personal information lives online. Make sure your executor or a trusted individual has access to your digital accounts, such as financial, social media, or email. Create a secure list of usernames, passwords, and instructions for accessing these assets, so nothing gets lost in the shuffle.
How to Safeguard Important Documents
Where you store these vital documents matters, especially if you live in an area prone to natural disasters. Here are a few practical ways to protect them:
1. Use Fireproof and Waterproof Safes
A safe that protects against fire and water damage is a great way to keep your will, trust, deeds, and other essential records secure at home.
2. Store Digital Copies
Make digital backups of all important documents and store them in a secure cloud service, like Google Drive or Dropbox, with encryption. This way, you'll have access to your estate plan from anywhere, even if you can’t physically return home. For added security, you might also keep a password-protected external hard drive with these files in a secure location.
3. Share Key Documents with Trusted Individuals
Give copies of critical documents to trusted family members, your executor, or your attorney. If you’re using digital storage, ensure these individuals have access credentials or set up shared access to ensure smooth management if you are unavailable.
4. Consider a Safe Deposit Box
Storing original documents in a bank’s safe deposit box can offer extra protection. Just be sure someone else has access if needed.
5. Create a Grab-and-Go File
Prepare a portable, waterproof folder with key documents like insurance policies, medical directives, and powers of attorney. This file should be easy to grab in case of an evacuation, giving you peace of mind that you have what you need when you need it most.
Why Estate Planning Is Key During a Crisis
By planning ahead, you're giving yourself and your loved ones a lifeline during uncertain times. A well-organized estate plan helps:
Reduce Stress: Your loved ones won't be left guessing about your wishes or scrambling for essential documents.
Ensure Continuity: With the right legal and financial tools in place, your assets can be managed smoothly, and healthcare decisions made without delay.
Prevent Disputes: Clear directives minimize family conflict and legal battles, especially in stressful situations.
Protect Assets: Proper storage and planning mean your documents will be safe from physical damage and accessible when needed.
Step Forward Now
Many people fall victim to the reality that estate planning is an important, but not currently urgent, planning task. And unfortunately, by the time that it becomes urgent, it may also be too late to fully protect yourself and your loved ones.
Having the right documents in place, safely stored, and shared with trusted individuals can save time, money, and emotional energy down the road.
Take steps now to ensure your affairs are in order and your family is protected—no matter what life brings.
~Jess
P.S. Have a loved one that you are concerned about? Unsure how to talk to your elderly family members about their wishes? Many people don't realize that these are also conversations that a financial planner can help with. Reach out and let's talk. 🙏
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