Imagine what would happen if you, or someone you love, gets hurt, sick, or even worse, if there’s an unexpected loss of life?
Now imagine how you’ll feel when you know that you’ve put a plan in place to make sure that you, everything you work so hard for, and the people you care about most will be OK no matter what happens, today and tomorrow.
That kind of peace of mind can be priceless.
Putting an up-to-date plan in place to protect your health, your wealth, and your loved ones should be a foundational element of any ongoing plan for your money. It’s just as important to protect your money as it is to grow it and use it well in support of the life you want for you and your family.
What most people miss when it comes to an estate plan
The term estate plan conjures up images of the lifestyles of the rich and famous. Yachts, private jets, mansions, you name it. It’s the idea that you only need to plan if you have a literal estate (a big house with lots of land and overly manicured gardens).
But this couldn't be further from the truth.
Estate planning isn’t just for the rich, and it isn’t just a plan for when you pass away. It’s a plan to protect your health, your wealth, and the people you care about most.
In short, it puts you in control, provides security for your loved ones, and helps you feel more confident in your everyday decisions.
We also want to be sensitive to the idea that estate planning can be a challenging topic to discuss, but it’s a critical step in the broader financial planning process to take care of everything and everyone you have worked so hard for.
The risks of not having an (up-to-date) estate plan
In the financial planning process, it’s important to ask, “What’s the plan if….?” When it comes to estate planning, without proper documents in place, there really is no plan and that puts you and your family at risk.
Here are the risks when you don’t have up-to-date estate planning documents:
No one to make important decisions: If you’re hurt or sick and can’t make decisions (i.e. you're incapacitated), there may be no one to make time-sensitive medical decisions or to manage your day-to-day finances. Your family would have to go to court to be appointed as your guardian so they can legally make decisions for you.
Uncertainty for your loved ones: Without proper instructions, state law and the courts determine how your estate is handled. This means your family may lack clarity and control (and face added stress) during an already trying time.
A lengthy, and costly, process: Your family could face a lengthy and expensive legal process. Probate typically costs 3-7% of your total estate’s value. This process can also tie up your assets for months, leaving your family in financial limbo.
No privacy: You generally have to share all of your personal financial information with the courts and that information is made public. The information isn’t proactively shared, but it is made available should someone want to see it.
Outdated documents: Your plan should evolve as your life, financial situation, and estate laws change. Major events like marriage, divorce, starting a family, buying a home, or moving (especially out of state) all require updates. Without them, your wishes may not be honored, and your documents could become invalid.
The good news is that you can avoid all of this with an up-to-date estate plan.
Why everyone needs an estate plan
If it isn’t already clear, everyone needs an ongoing estate plan. However, the complexity of that plan will change based upon your situation. And it doesn’t have to be a hard, expensive, and time-intensive process.
Here’s why everyone, regardless of age or wealth, should have an estate plan:
- Control over your money: With an estate plan, you get to decide how your belongings are distributed after you pass away. This allows you to protect the people you care about most.
- Managing healthcare and financial decisions: By putting essential documents in place now, you ensure that someone you trust can make important financial and healthcare decisions on your behalf, if you can’t.
- Security and peace of mind: The peace of mind that comes with having a solid plan in place is invaluable. You can rest assured that your family won’t have to navigate complicated legal processes during a difficult time, and they will know exactly what your wishes are.
Remember, estate planning is an ongoing process. Once you have an initial plan, it should be reviewed periodically and updated when necessary.
Key documents in an estate plan
An estate plan isn’t just one document. It’s a collection of legal tools that ensure your wishes are respected. Here are the key documents every estate plan should include:
A will
A will is the foundation of your estate plan. It outlines how your assets—money, property, and other belongings—will be distributed after you pass away. You’ll name someone (an executor) who will manage your affairs and file the will in court when you pass, a process called probate. If you have young children, you can also name someone (a guardian) to care for them.
Note: A will doesn’t cover jointly-owned accounts or retirement accounts and life insurance policies with designated beneficiaries. In these situations, the ownership (i.e. titling) or beneficiary designations supersede the will.
Example: Let’s say you have a 401(k) through work and you name a sibling or a parent as the beneficiary. Then, down the road, you get married and start a family, but you forget to update your beneficiaries. If you pass away, your 401(k) will go to the named beneficiary even if your will states that you want this money going to your partner.
A financial power of attorney (FPOA)
An FPOA allows you to designate someone (your "agent") to handle your financial matters if you’re unable to. They can pay bills, manage investments, and file taxes on your behalf. There are two types:
- One that takes effect immediately, allowing your agent to act even if you're still able to make decisions.
- One that has a "springing" power that becomes active if you become incapacitated.
Healthcare power of attorney (HCPOA) or advanced directives
An HCPOA names someone to make medical decisions for you (again, your “agent”) if you’re unable to. Without it, medical professionals may make decisions on your behalf without consulting your family. Advance directives are instructions outlining the care you want (or don’t want) in specific situations, such as end-of-life care.
A revocable trust
A trust often sounds more involved than it is. It’s a legal document that explains how you want to manage the things you own (i.e. your property, savings, and investments) after you pass. It helps your family avoid probate, provides privacy, and allows you to control how your money will be managed. And it can be changed or canceled at any time, offering flexibility.
A trust isn’t necessary for everyone but it can be a powerful planning tool in the right situations.
Your options for creating an estate plan
At this point, you’re probably wondering how to get estate planning documents. The good news is that you have options. The hard part is that you have to know how to choose between them. Don’t worry, we’re going to make this a little easier for you.
The best solution usually combines three things:
- A personalized approach
- High-quality work
- Affordability (i.e. a fair price)
Some online and digital services are inexpensive but offer boilerplate solutions (i.e. they lack personalization) which means they also lack quality. In-person attorneys offer personalization, but they can cost you $3,000, if not more. And then you have the fun task of vetting attorneys. In our opinion, these solutions could be helpful for certain situations but they may not be perfect fits and may have their own drawbacks.
However, a third option exists that combines personalization, quality, affordability, and an easy-to-use technology platform. In our opinion, this is a winning combination. Here’s how we’re making this available to our members.
An exclusive partnership for the protection you need
At Facet, we’re here to help you protect everything you work so hard for today and tomorrow. The most important thing is to have an estate plan, wherever you decide to get one. But to make it easier for our members to get theirs, we’ve partnered with wealth.com to help you design and implement an estate plan to take care of the people you care about most.
Why did we partner with wealth.com?
- They offer an intuitive tech platform and a self-guided, online experience to make the process easier for you.
- You’ll have access to live customer support to answer your questions throughout the process.
- Experienced trust and estate attorneys support and consistently inform the online process to ensure high-quality, personalized, and state-specific plans.
- And, their membership includes not just initial estate planning documents but ongoing monitoring and updates as life, your finances, and laws evolve.
More importantly, their offering helps Facet members get the estate planning they need because their process is simple and actionable. And advice combined with action is where we see results.
Put yourself in control, protect what matters, and create security and peace of mind for you and your loved ones. This is what estate planning is really all about.
The most important part, taking action
You can log in to your Facet account and take advantage of the offer in your dashboard. If you have any further questions please don’t hesitate to reach out to your planning team.
**This partnership is offered exclusively to Facet members. If you are not a member and want to learn more about the power of financial planning, and estate planning just schedule a call.**
