Steps to Reduce Stress Through Estate Planning

Steps to Reduce Estate Planning Stress

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I don’t know about you, but I sometimes find life stressful. Ok, let’s be honest here, I often find life to be stressful. A lot of my stress comes from not being in control. When I can’t control what is going on in my life, I become anxious. Anxiety then leads to stress. But, what if I told you that your estate planning stress could be controlled? Better yet, what if I told you the steps to reduce stress through estate planning?

Interested? Then you need to read on to learn the steps you can take today.

Step One: Assess Your Life Situation

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The first step is to think. Think about your life situation. Are you married? Do you have children? Retired or still working? Healthy?

You need to first assess your life. Then, you need to think about what you want to happen with your life. Specifically, you need to really think about who you would want to manage your affairs if you became disabled or ill. Who do you trust to make those decisions for you? Who in your life would be capable of making the same decisions you would if you were able to do so.

You then need to start thinking about health decisions. What types of medical care do you want to receive? Are there any medical treatments you are opposed to receiving? What about end of life decisions? Would you want your life unnecessarily prolonged if you were not going to recover or improve?

Finally, you need to start thinking about what you want to happen when you die. Who will receive your assets? Do you know who will be in control of your estate after you pass? Do you have a disabled spouse or child you need to protect? Who do you want to care for your children if they are still minors when you pass?

Yes, these are difficult questions to answer. But, by thinking about, and answering these questions, you are on your way to getting your estate plan done. And, better yet, you are reducing the stress in preparing your estate plan.

Step Two: Create Your Plan

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Next, you need to create your estate plan. Your estate plan consists of two types of documents. One set of documents includes the plans for what will happen during your lifetime. The other set includes documents that plan for after you die.

Living Estate Plan Documents

With the first set of documents, you are naming persons who will be in control during your lifetime if you are unable to act on on your behalf. A Durable Power of Attorney is a document where you appoint someone to manage your financial affairs if you become disabled or incapacitated. Likewise, a Health Care Power of Attorney is document where you appoint someone to make medical decisions for you.

You can also execute a Living Will. In this document you state whether you want life saving measures taken if you are near death.

The Health Care Power of Attorney, Living Will and Durable Power of Attorney documents are your lifetime documents.

After Death Estate Planning Documents

When you die, you will need to either have created a Will or a Trust to carry out your wishes. A Will, otherwise known as a Last Will and Testament designates a person to carry out your wishes. That person is known as an Executor. He or she will admit your Will to probate court and carry out your wishes as set forth in your Will.

Within your Will, you designate how your assets will be divided at your death. You specify who will receive what assets from you when you die.

If you have children under the age of 18, you can state who you want to care for your children if you die before your children become adults. This person is known as the Guardian of your children.

Some people elect to create a Trust instead of a Will. A Trust can be used to determine when people receive your assets at death. I mean, would you really want your 18 year old to come into his or her full inheritance at 18? Or, would you maybe want to control how much he or she can spend until they reach a more mature age of 30?

Or may be you have a child or spouse who is mentally or physically disabled. You may want to establish a Supplemental Needs Trust for them. That way, you know he or she will be cared for and still be eligible for needs based government benefits such as Medicaid.

Step Three: Storage of Your Estate Plan Documents

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Ok. You have your estate planning documents. Now you need to decide where you will store your documents. After all, your documents won’t be much good if no one knows where to find them when needed.

You should store your documents in a protected place such as a fireproof safe in your home or a safe deposit box at your bank. Make sure you tell your Executor and your Attorney where your documents are stored.

I recommend making a digital copy of your documents as well. I always give my clients a digital flash drive with copies of their signed documents on it along with their original documents.

Step Four: Organize Your Documents

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You should place copies of your estate planning documents in readily accessible place. You could store the documents in a file cabinet. Or, you could place the documents in a tabbed binder.

While you are getting your estate planning documents organized, don’t forget about related documents. Compile a list of your assets and update it yearly. Also, create a list of your passwords and digital assets. Make a list of people to contact at your death. You may even want to write out a plan for your funeral service. These are all examples of documents to organize and keep with your estate planning documents. Trust me, your Executor will thank you later.

Step Five: Talk To Your Family Members

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I highly recommend you talk to your family members about your estate plan. That way, there are no unpleasant surprises. Explain to them why you are doing what you are doing.

You need to let your family members know where your important papers are stored. The last thing you want is for them to be scrambling around looking for them frantically when an emergency arises.

Talk to your family about your health wishes. Do wish to remain in your home for as long as possible? Would you want to go to an assisted living or move in with one of your children? Do you want to be buried or cremated? These are important issues your loved ones should know ahead of time.

Step Six: Review, Revise, Revisit

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Ok, you have created your estate plan. You’re done, right? Not quite.

You need to periodically review your estate plan. You want to make sure your plan is right for whatever stage of life you are in currently. Are you now married, divorced or widowed? Do you have kids or are they grown now? Have your medical needs changed?

You see, life happens. When life happens, sometimes changes occur that could affect our estate plan. Examples of some life changes that might affect your plan:

  • Marriage;
  • Divorce;
  • Death of a Spouse;
  • Moving to another state;
  • Children;
  • Change in Income or financial circumstances.

When changes occur, we sometimes need to revise our estate plans to meet those changed circumstances. So, you should at least review your estate plan every 3-5 years. And, in the event of a life change, definitely review your estate plan to see if you need to revise your plan.