Wednesday, May 26, 2010

Estate Planning

I covered the main ways of diagnosing your financial health in this past post.  I've been using Wednesdays to go further in depth on each point since I truly believe that financial health leads to less stress and happier lives.

I have already covered the first six points - Spend Less Than You Earn, start an Emergency Fund, review Retirement Savings, evaluate Debt, Diversify your investments, and have enough Insurance.  The seventh point is to make sure you have an estate plan in place.

When you are looking to start an estate plan, you first need to answer these questions:

1.  What assets do I have and what are they worth?
2.  Who should receive those assets?
3.  Who should manage those assets if I can't?
4.  Who can take care of the kids?
5.  Who should make decisions on my behalf if I can't?
6.  How do I want my remains handled?

When you know the answers to those questions, you can successfully make a will, a power of attorney, and a medical power of attorney.  Most people seem to recommend consulting an estate lawyer to get the documentation completed and notarized.

During this process, I'd also get together all the official papers in one place.  Your remaining family will appreciate being able to easily find account numbers, insurance policies, and other emergency information.

In my marriage, I handle most of the day-to-day finances.  I know the account numbers and where the life insurance policies are.  I know the passwords and which bills need to be paid and when.  I also know where all the money is and how we like to move it around.  My husband and I have not had the official paperwork done yet, but I do have an "Emergency Pack" together that will hopefully never be needed.  But, if I die first, my husband will at least have access to all our accounts.

Do you have an estate plan in place already?  How about an emergency pack?


  1. My wife and I have a plan in place. Seemed like a no brainer to me when my daughter was born. Everything gets passed to her in a trust that she doesn't have full access to until she turns 25. If both my wife and I go at the same time, my daughter would end up with over $2M. Seemed like a good idea to have her wait a little bit before she has complete access. Her guardians can access the money for her living expenses only or any she might need.

    I need to get an emergency pack together. Everything is in my budget spreadsheet,so my wife knows about that. But if something happens to both of us, our families might not know where everything is located. Good idea.

  2. I don't have an Estate Plan, even though I know anyone with assets needs one. I just keep hoping that I'll be fine, at least until I have kids, and someone to leave my assets to.

    I know, I know, this is not a plan.

  3. We do. We have power of attorney forms, wills, living wills, etc. I also have a trust set up. I do need to get all the day-to-day what gets paid out of which account stuff done though.

  4. We have an estate plan in place. We actually did it when my husband and I were flying to New York years ago and left our kids with friends. I felt so much better having the guardian named for my kids and all the other stuff. We had an estate planning lawyer handle it all and it was great.

    You make a lot of really good points. Another thing to consider is if you want to put all your assets into a trust (which is a lot of work!) Also, it is also good to specify what age your children should get money from the trust (if you set one up) if both parents pass away.

    I also handle all the house finances. I have a folder that is kept with our will that explains all our assets, account numbers, and other info. Hopefully my husband remembers where it is... :)

  5. Mike S, yeah, with kids I can see it becoming a priority. An emergency pack or even just a list of accounts and passwords would be a big help I’d think…maybe you could put it in a safe or safety deposit box and leave the code or key with the rest of your estate stuff.

  6. Young Mogul, I’m right there with you. I have a list for hubby with accounts, passwords, and life insurance info, but we don’t have any of the stuff I mentioned above like wills and power of attorneys since both our names are on everything. I figured we could put it off until we had kids or our mid-30’s, whatever comes first. Now I’m thinking we might want to do this sooner rather than later, but I still don’t feel a pulling need…I’ll let you know, lol.

  7. Jackie, wow, you are ahead of the pack like MikeS…it seems like having kids really gets people moving in this arena. :-)

  8. Everyday Tips, another parent with a plan, lol. And you have an emergency folder too. Okay, now I wish I had gotten you to write this post…