5 Reasons To Have An Updated Estate Plan—And What To Include In It

As moms, there’s nothing we wouldn’t do to protect our children and ensure their happiness and security. Part of that protective instinct involves planning for the future, even for times when we might not be around. That’s where having an updated estate plan comes into play. Today, let’s talk about why it’s crucial for parents to have an up-to-date estate plan and what essentials should be included in it.

Reason #1: You Want To Protect Your Kids

At the heart of every parent is the desire to protect their children. An estate plan allows us to do just that, even in our absence. By naming guardians for our children within our estate plan, we ensure that they are cared for by trusted individuals of our choosing, rather than leaving this critical decision in the hands of the court.

This step alone can give you peace of mind, knowing your children will be in good hands no matter what.

Reason #2: You Don’t Want Your Family To Experience Legal Issues

Navigating the legal system is the last thing we want our families to deal with during a time of loss. An up-to-date estate plan, particularly one that includes trusts, can help your family avoid the lengthy and costly probate process.

This foresight means that assets can be transferred to heirs more quickly and with fewer legal hurdles, sparing your loved ones from additional stress during an already difficult time.

Reason #3: You Want Your End-Of-Life Wishes To Be Respected

We all have preferences about how we want to be cared for at the end of our lives, but unless these wishes are clearly documented, they may not be followed. An estate plan often includes advance healthcare directives and a living will that outlines your wishes regarding medical treatment if you become incapacitated.

Updating these documents ensures that your current preferences are known and can be adhered to, respecting your autonomy even when you can’t speak for yourself.

Reason #4: You Want To Make The Most Of The Money You Leave Behind

No one wants to see the hard-earned money they leave behind get eaten up by taxes or mismanaged. For estates that may be subject to estate taxes, an updated estate plan can include strategies to minimize these taxes, preserving more of the estate for your intended beneficiaries.

Estate planning laws can change, so keeping your estate plan updated ensures that it takes advantage of current tax laws and estate planning strategies, maximizing the legacy you leave behind.

Reason #5: You Want Financial Peace Of Mind For Your Family

Ultimately, all parents want to know that their family will be financially secure after they’re gone. An updated estate plan can help ensure that financial resources are allocated efficiently and effectively to support the surviving spouse and children.

This includes clear instructions for distributing assets, the designation of life insurance proceeds, and the setting up of trusts to manage inheritances until children reach a responsible age, providing a financial safety net that can last for years to come.

5 Elements To Include In Your Estate Plan

1. Will

The cornerstone of any estate plan is a will. This legal document specifies how your assets should be distributed after your death and can also nominate guardians for any minor children.

Without a will, your estate will be distributed according to state laws, which might not reflect your wishes. Crafting a will ensures your voice is heard, even in your absence.

2. Trusts

Trusts are invaluable tools in estate planning, allowing a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. A trust can be used to manage your estate, help avoid probate, reduce estate taxes, and provide for the management of assets in various circumstances, including incapacity or for beneficiaries who may not yet be able to manage their inheritances directly.

3. Power Of Attorney

A durable Power of Attorney (POA) is essential for ensuring that someone you trust can manage your financial affairs if you become incapacitated. Additionally, a healthcare power of attorney allows you to designate someone to make healthcare decisions on your behalf under the same circumstances.

These documents ensure that your financial and medical affairs are in trusted hands.

4. Life Insurance

Life insurance plays a pivotal role in your estate plan, offering a safety net to your beneficiaries by providing them with financial support after your passing. It’s especially crucial for parents, acting as a means to secure your children’s future by ensuring they have the necessary funds for their care and education.

And with instant decision life insurance, it’s easier to have a policy now than ever before. Reviewing and integrating life insurance into your estate planning not only offers immediate financial relief to your family but also aids in covering any debts, funeral expenses, and future financial needs.

5. Beneficiary Designations

Often overlooked, beneficiary designations on accounts like retirement plans and life insurance policies are incredibly important.

These designations can override instructions in your will, so it’s critical to review and update them regularly to ensure they align with your current estate planning goals.

Wrapping it Up:

Embarking on the estate planning journey might seem daunting at first, especially amidst the busy days of parenting. Yet, understanding its importance and ensuring it’s up to date is one of the most profound acts of love and responsibility we can undertake as parents.

It’s about more than just allocating assets—it’s about securing our children’s future, ensuring our wishes are respected, and providing peace of mind for ourselves and our loved ones. So, take a moment today to consider your estate plan.

If you haven’t started, now is the time. And if you have, maybe it’s time for a review. Our love for our children is everlasting, and through a comprehensive and updated estate plan, we can ensure our support and guidance continues, even when we are not around to provide it in person.