If You Had 2 Months to Live, Are You Estate Planning Prepared?
What would go through your mind if you were suddenly told by your doctor that you had two months to live? Would you be prepared? What would you do? How would you choose to live the remaining time that you have?
This is news that was given to my father earlier this year. It’s difficult news – especially for your loved ones. Based on his parents’ longevity, he was planning on living for another thirty years. But after receiving such shocking news, my father decided to live his life just as he would have otherwise. Aside from when he was unable due to medical treatments and their side effects, he continued working, spending time with his loved ones and traveling when possible. He didn’t want to be treated differently by others, and he didn’t let his diagnosis get him down.
Was he in denial about his condition? Not at all. He knew what was likely ahead in his near future. And thankfully, because of that, the one change he did make was he immediately started planning. Although he’d had estate documents in place and periodically updated for years, the week after his diagnosis he had his estate plan reviewed and updated. He made sure everything was in line so the transition would be as easy as it could be for my mother, his executor and trustees. He also spent countless hours making sure that he had a flawless succession plan in line at work.
Through this difficult time, it became very clear to me how essential estate planning is. As a financial advisor, I have taken classes on risk management and estate planning, so I have known for a long time that it is important. But this made it much more real.
Many individuals put off estate planning because we don’t like thinking about our mortality. We would rather continue life as usual without having to deal with the hassle of tasks like creating estate documents or choosing guardians for minor children. Don’t make that mistake. None of us are promised tomorrow, so it was best to have a plan in place ahead of time to make the transition as easy as possible for his employees and his clients.
Benefits of Estate Planning
- Making the transition much easier on your dependents and loved ones
- Giving you control over your assets after death
- Assigning guardians and allocating assets for minor children
- Directing the distribution of your assets instead of having the state decide
- Assigning those who will control your assets after death
- Helping reduce estate taxes and probate costs
Estate Documents You Should Have in Place
- Last will and testament (also known as simply your “will”) – Allows you to direct the distribution of your assets at death instead of having state laws determine that for you
- Living will / Advanced medical directive – Expresses your last wishes regarding sustainment of life under certain circumstances
- Springing power of attorney – Allows an individual do act on your behalf in the event that you are unable to do so on your own
- Healthcare power of attorney – Establishes an individual to make health care decisions for you
Other Important Estate Updates
Another aspect of your estate that you should check on and update periodically are the beneficiaries listed on assets that pass outside of your will, like retirement accounts (IRAs, 401(k)s, pensions, etc.) and life insurance policies. When checking beneficiaries, make sure that you cover any beneficiaries’ potential name changes due to marriage or divorce and keep their addresses current. And you should consider whether you need to have a succession plan in place at your place of work.
If you do not already have one, establish an estate plan as soon as possible. If you already have an estate plan, review it annually to make sure that no changes are needed. And if changes are needed, do not wait to make the updates. In the event of an emergency, you and your loved ones will be so grateful that you did.
Having an estate plan in place is essential, whether you are young or old, married or single, wealthy or poor, healthy or unhealthy.
Most Read IRIS Articles of the Week: March 19-23
Here’s a look at the Top 11 Most Viewed Articles of the Week on IRIS.xyz, March 19-23, 2018
Click the headline to read the full article. Enjoy!
Let’s pretend you are a US investor that wants to deploy some of your money overseas. You think international developed market stocks are attractive relative to US stocks, and you also think the US dollar will decline over the period you intend to hold your investment. — Chris Shuba
I had a chat with The Financial Times the other day, and provided lots of background as to why I don’t think cryptocurrencies are the choice of criminals. The comment that was reported was the following ... — Chris Skinner
During the tumultuous red and green gyrations of the capital markets this year have your clients anxiously called to ask: “What’s going on with my portfolio?” What do you do when the usually smooth ride in your luxury automobile becomes as bumpy as Mr. Toad’s Wild Ride in the Happiest Place on Earth? What does the average investor do? — Ted Parker
Inflation is a bad thing, right? It make things more expensive, right? For those of us of, let’s say, a certain vintage, we recall the runaway inflation of the late 1970’s and early 1980’s. So why does the Federal Reserve – in charge of managing the country’s currency and value thereof – actually try to create inflation? It’s called the inflation targeting and it matters to your money. — Bill Acheson
As you near your 60’s, your prime earning and saving years will transition into a period of time where you get to enjoy the “fruits of your labor,” a.k.a retirement. We call this segueing from accumulation to decumulation, the period when you will be drawing from your accumulated nest egg. — Dana Anspach
Exchange traded funds (ETFs) are popular vehicles for market participants looking to engage in thematic investing. Thematic investing looks to take advantage of future growth trends, including disruptive technologies. Given that forward-looking approach, stock-picking in the thematic universe is equally as hard, if not harder, than in traditional market segments. — Tom Lydon
It’s not enough for your salespeople to be product experts, they also need to be capable of having the kind of conversations that position them as business experts and even strategic resources. — Lisa Rose
Business growth doesn’t come from wishful thinking. As you know, it takes a lot of hard work. The growth of your business is not an option – it is a necessity. Coordinating the right mix of strategies to gain market share and improve client acquisition rates is essential to advance your firm in today’s economy. — Michelle Mosher
It’s undoubtedly true that investors’ financial security is no laughing matter, and this is reflected in the stolid, dour, reliable imagery and branding that is, by and large, the industry standard. This is hardly surprising—investors need to believe they’re placing their hard-earned money in the hands of experienced, trustworthy professionals. — Alexandra Levis
The number one question advisors ask when exploring a move to independence is how the economics compare to accepting a recruiting package from a major firm. It’s certainly a valid concern, because while the recruiting deals being offered by the wirehouses are down, it is still very possible for a top advisor to get a really attractive hard-to-pass-up offer. — Mindy Diamond
Municipal bonds might not be the first thing that comes to mind when you think of a sexy investment. They don’t typically command news headlines like the stock market or bitcoin. — Frank Holmes
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