An estate plan is a series of documents that outlines how you want your affairs managed when you are no longer able to do so yourself, either due to incapacity or death. Creating and properly executing a plan allows you to have control over who makes financial and medical decisions for you and ensures that your legacy is passed on according to your wishes. Here are a few common documents an estate plan might include:
- Financial Power of Attorney: authorizes another (agent) to manage your finances on your behalf.
- Medical Power of Attorney: authorizes another (agent) to make medical decisions for you. 3. Living Will: also known as a healthcare directive; specifies medical treatments you would or would not want, such as life-sustaining measures and pain management.
- Last Will and Testament: names the individuals or charities you want to receive your property at death and nominates the party in charge (executor) of carrying out those directions. May also nominate a guardian of minor children.
- Revocable Living Trust: a trust created during life to manage and protect assets while you are alive and well, at your incapacity, and at your death. Like a will, a revocable living trust provides directions for distributing your assets to named individuals or charities. Unlike a will, assets in a properly executed revocable living trust do not go through the court-supervised probate process.
- Beneficiary Designations: a named party (beneficiary) who will receive the asset or account. Life insurance and retirement accounts commonly have beneficiary designations. Beneficiary designations control who receives the account, regardless of what a will or trust document states.
If you have already created an estate plan, you are on the right track. However, an estate plan is not something that should be set once and never reviewed again. It might be time to dust off your documents if you’ve:
- Had a life change (birth, death, marriage, divorce)
- Moved from one state to another
- Purchased or sold a property or significant asset
- Started a new job
- Received an inheritance
- Had a child or grandchild reach adulthood
State and federal law changes can also impact your current plan, so periodically reviewing these documents is an important habit to implement. At a minimum, review your documents every three to five years. If you work with a financial advisor that provides estate planning, you can incorporate a regular review in conjunction with your financial plan review. Otien, the two go hand-in-hand.
At Choreo, estate planning is a core service, along with financial and retirement planning, tax planning and investment management. Our team has decades of experience helping individuals and families with
complex fact patterns. We can work with your attorney and tax professional to develop, implement and monitor your estate plan. Proactive and timely review of your estate plan can help you achieve your goals and prevent financial and emotional distress to you and your beneficiaries.
Erin Christy, JD is a director of wealth management with Choreo, an independent firm focused on redefining the RIA’s place in the wealth advisory industry. She helps clients navigate all areas of their financial lives. choreoadvisors.com
Choreo, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration as an investment adviser does not imply a certain level of skill or training of the adviser or its representatives.
