Estate Planning 101: Why Estate Plans Matter

70% of people don't even have a will. 

our primary goal throughout your working years is to support yourself, your family, and to create a lifestyle that also leaves a legacy. So, how is it that almost 70% of people don’t have even so much as a will? Many of us haven’t planned for transitioning our hard-earned wealth to others after we pass. While a financial plan sets a path for our retirement years, not having an estate plan is like letting all that work flounder.

Estate planning sets a guide for how the wealth you built can continue to grow and support your family after your death. It’s possible many of us imagine living until a ripe old age, but sadly, that’s not always the case. A will is a small part of an overall estate plan, but it’s one of the most valuable.

What Happens if You Don’t Have an Estate Plan?

If you don’t have an estate plan in place, there are a few ways things may go. Your dependents are left guessing on a variety of issues like what, how, and when they might inherit money or property, how they’ll pay for your funeral expenses, debts, and bills, and how you would have wanted everything to play out. Grief is a powerful emotion – even the National Mental Health Association has said that “the loss of a loved one is life’s most stressful event,” – no one wants to leave a financial headache to their grieving families.

If you die without a will, you’re referred to as having died intestate. Without a will, you (most likely) did not name an executor and your estate will move to a probate court where a judge will appoint someone to be your administrator. 

Generally, a person’s spouse will fill this role, then surviving children. If you have a disagreeable family, this process may go on until an administrator is appointed. Because every state has their own laws governing estates, they also have laws as to who can serve as administrators. In Oklahoma, for instance, if you have no family or next of kin, it’s possible for your creditors or “any legal and competent person” to step in to administer your estate. For many of us, that’s a hard pass, but if you don’t have a plan, you don’t have a say.

An Estate Plan Will Help Your Financial Plans

1. It can protect you.

An estate plan can protect you in that it gives you the ability to lay out your plans for your estate. You’re able to name an executor, and give financial and health powers of attorney so that even if you’re incapacitated, your wishes will be respected.

 2. It can protect your beneficiaries.

If you own property and have money in the bank, you would prefer it go to someone you designate, rather than someone you didn’t. Whether by will or trust, you can make sure your beneficiaries not only inherit what you wish, but that they’re able to be your estate's decision-maker, and protect their inheritance from outside intervention. Additionally, if something happens to you and your spouse, and you have minor or young adult children, an estate plan can designate their guardians, and potentially pay for future expenses.

3. It’s more than a will.

It’s important to remember that a will is not an estate plan, it’s part of an estate plan. A will may bequeath your beneficiary a sum of money, but it doesn’t necessarily lay out conditions or prohibit how they might spend it. Additionally, an estate plan covers so much more – from finance and health powers of attorney, to living and revocable trusts, personal property memorandums, as well as end of life care directives. Many of us change or create our wills after significant events scare us into the realization we need to have our estates prepared – the Covid-19 pandemic saw a veritable race to get documents in order – but none of us wants to weather a storm outside, we’d rather have spent the time to build a shelter.

4. Save time and money

Not every estate will need to make its way through probate court, but if it's complicated, your state may require it. With a plan in place, it could be (relatively) smooth sailing and fully distributed in a few months; without one, you could be looking at years. Planning ahead keeps your family safe, your wealth managed, and if nothing else, keeps your overall financial plan in the best possible shape.

5. Help you and your beneficiaries save on taxes.

A will can make a lot of provisions, but it won’t necessarily save you on taxes. For that, an estate planner or certified financial planner, can help you figure out how to avoid certain taxes, pay less, move assets into trusts, and more so you don’t give away your wealth to taxes.

Navigate the Challenges of Estate Planning with Professionals

At Fullerton Financial Planning, our goal is to help you enjoy your retirement with confidence, not worrying about whether you have enough money to enjoy it. Our certified fiduciaries and experienced investment advisors have decades of combined experience helping people find answers to difficult financial questions. Sit down with a Fullerton Financial Advisor today to discover if you are on the right track for your retirement goals. 

We understand how important your financial future is to you and your family; we also understand how difficult making these plans can be. Incorporating an estate plan into your overall retirement vision can be challenging tackling on your own, especially with such personal and complicated subjects. When you schedule a call with Fullerton Financial Planning, we’ll help you develop an all-inclusive plan that checks all the boxes and lets you sleep better at night.

Don’t leave your financial future to chance. Let us help you create a personalized plan so you can enjoy the retirement you’ve worked so long and hard for.