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Is Trust and Estate Planning Right for Me?

By Kristin Hoppe

April 15, 2021


You've probably heard of a will or trust before — but what about an estate plan?

Although an estate plan may sound like it's only reserved for elders and the very wealthy, it's increasingly common for everyday people to create one.

In fact, the number of adults between the ages of 18 to 34 who have an estate planning document increased by 63% from 2020 to 2021. In other words, more adults are seeing the value in having an estate plan, even if they're on the younger side.

The same study showed that more Americans who make $40,000-$80,000 a year have also turned to estate planning, which means it isn't just for extremely wealthy families.

Still, knowing where to start with estate planning can be confusing. This article will give you a rundown of the basics.

What is an estate plan?

An estate plan is essentially a set of legal documents that explain how you want to distribute and protect your assets when you pass away. But this doesn't exclusively include assets or property, either. An estate plan also includes instructions on future care for your children and end-of-life medical decisions if you don't have the capacity to advocate for yourself.

Who should have an estate plan?

Even if you don't have a large amount of assets, it's a good idea for anybody to have an estate plan in order to efficiently distribute cars, money, real estate, and any other assets that are important to you. It's especially important if you have loved ones you're leaving behind and would like to make sure they are in a good place, should the worst happen.

What should an estate plan include?

Medical decisions

  • A living will – Details specific medical treatments and preferences you may or not want if you're not able to make said decisions for yourself. Includes end-of-life decision-making, such as palliative care. A living will is also called an advanced directive or directive to physicians.

  • A medical power of attorney – A legal document that gives one person the authority to make medical decisions for you. This would only be in the case that you are unable to advocate for yourself.

Estate decisions

  • A power of attorney – A legal document that gives one person the power to act for you, in case you become ill, incapacitated, or otherwise unable to make decisions about your finances, property, and medical care.

  • A will – A wide-ranging document that covers many different subjects, including guardianship of children, estate distribution, asset details, and even funeral arrangements.

  • A trust – A legal entity that allows a beneficiary to hold property on behalf of you or a group. Usually there are rules attached to this, such as beneficiaries receiving money at a certain age.

What are the biggest benefits of having an estate plan?

Putting together an estate plan might feel overwhelming due to the sheer number of legal documents required. However, taking this step has a wide array of benefits for both you and your loved ones.

Plan for future financial events
Having your affairs in order is a gift to your family. It prevents confusion over next steps when you pass away, and easily allows you to transfer your assets (or business) in a way that is clear.

Arrange for difficult scenarios
Estate planning isn't just about money or property — it's also about giving instructions for your care if you become incapacitated or unable to make medical decisions for yourself. This ensures your wishes will be respected, and may help lighten the burden of difficult decision-making from your family.

Solidify childcare and inheritance
Who will take care of your children should the worst happen? Have you considered options like life insurance to provide money for family living expenses when you pass away? Who will inherit what? Answering these big questions will have a large impact on your family down the road.

Minimize costs
Passing down your property and assets can quickly add up and take away a big chunk of what you intended to give. Estate planning helps minimize overall costs by eliminating certain legal fees, curbing court costs, and reducing taxes wherever possible. In the end, this means your loved ones will receive a bigger piece of the pie.

How do I create an estate plan?

Due to the legal nature of estate plans, it's wise to bring in a professional to ensure all your documents are clear and legally binding.

An estate planning attorney can help you with:

  • Making a will or trust(s)

  • Designating beneficiaries

  • Declaring your power of attorney and medical power of attorney

  • Reducing and avoiding estate taxes

  • Avoiding probate in court

Attorneys usually charge a flat fee for these services, but may also offer hourly fees for additional help.

Even if you decide to draft the documents yourself, hiring someone to check that they're correct and legally binding could make the difference between an easy transition of assets to your family and a prolonged process in court.

Trustworthy Can Help

Trustworthy is the Family Operating System®, an online service that helps your family curate, manage and securely share your important family information so that you have peace of mind, no matter what the future holds.

Our concierge helps you find estate planning lawyers in your area to create estate planning documents. You can learn more about Trustworthy here.