Don’t leave your estate planning up to chance!
Cassie Laymon and Jake Preston discuss which estate planning documents you need, highlighting the five most crucial documents.
Watch the video to learn more!
Transcript
Cassie Laymon:
Jake, we’re getting ready for the holiday season. People are thinking about their shopping and their parties, but they also might be thinking about their 2024 goals. And often that’s financial goals. Sometimes that’s about budgeting and sometimes it’s about estate planning and making sure that you have all your documents ready to go. And so I wondered if you could just take a minute today and tell us what are the crucial documents that you need in place for estate planning?
Jake Preston:
Yeah, it’s great to be with you, Cassie. So when you think about estate planning, the major documents that everyone really needs to have prepared so they control what happens both to themselves and to their assets. There are really five.
And so the first one would be your will and the will is the one that people are probably most familiar with. This controls what happens to your assets, your property at your passing. It’s also a place where you can designate guardians who will take care of your children if something were to happen to you while they were still young. So the first would be the will.
Second is your beneficiary designations. So if you’re not familiar, anyone listening your retirement accounts like IRAs, Roth IRAs, you can actually put beneficiaries on those so that they pass by contract rather than going through your estate and potentially going into probate. What a lot of people don’t always consider is that the beneficiary designations on retirement accounts actually trump the will. So you want to make sure that your beneficiary designations and your will are in alignment with each other.
Cassie Laymon:
So really also just as we’re thinking about this, if you’ve had any life changes, like if you got divorced or if one spouse passed or something, you want to go back and check your beneficiaries if you got married and make sure it matches what you really want to happen. That’s something people forget all the time.
Jake Preston:
Absolutely. Yeah. It can be easily neglected, especially when you’re thinking about life changes. Yeah, you want to stay on top of those beneficiary designations. So the will, beneficiary designations.
The third would be a power of attorney and specifically a durable power of attorney. And this document designates a person or multiple people and you can have various levels and it really designates who’s going to make financial decisions for you if you aren’t able to make them for yourself. So that’s a durable power of attorney.
There’s also a healthcare power of attorney, and this is similar to a durable power of attorney, but this one is for healthcare matters. So if you’re unable to make healthcare decisions for yourself, who are you designating to make those decisions on your behalf?
And then fifth, finally, your living will. This is language that you can put into your advanced medical directive that states what medical measures are to be taken or not taken for you if you’re close to the end of your life. And so a lot of people put that language in their advanced medical directive to really release the burden from other family members of them having to make end of life decisions.
And so those five documents, if you have those drafted and they’re up to date and they reflect your wishes, you’re ahead of most Americans.
Cassie Laymon:
That’s great. And one other thing I thought of Jake is when you’re thinking about who’s going to be your executor, who’s going to be your how power of attorney, you want to think about people who have the skillset to do that job.
So you want to choose people who have good financial acumen to do the executor, to do your power of attorney. And then when you’re talking about your healthcare power of attorney and your living will, that’s a whole different skillset. That’s a relational skillset. It might not be the same person, and so you want to think about the people that you’re appointing.
Alright, Jake, thanks for that tip for today. If anyone has any questions and want to talk further about it, don’t hesitate to reach out to us at info at beaconwealth.com or 540-345-3891. We’ll be glad to answer any questions you might have. Thanks, Jake.