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Wealth & Well-Being

The Difficult Questions You Need to Answer in Preparing and Reviewing Your Estate Plan

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We spend much of our working lives saving, planning, accumulating, and preserving in preparation for our golden years. Sometimes, our wishes are to leave a legacy both financially and personally to the next generation and to causes that are dear to us.

While that might be our ideal, few people complete the planning to ensure it happens. Often times, we fail to address difficult and emotional issues, either because they're too uncomfortable or it's an easy topic to put off. An Ill-carried out estate plan can lead to more difficulties than no planning at all.

By considering these questions now, it's possible to make difficult periods of illness or a sudden passing a little more manageable at the time.

1) Do I Need a Formal Estate Plan?

Every one of us already has an estate plan. The question is whether it was created by you, or provided to you by the state you reside in. Absent the basic legal documents that describe your wishes, the state determines your legal and financial affairs, including the guardianship of your children.

The objective of your estate plan is to ensure that the intentions and desires you have for you and your family are adhered to. Documenting your wishes, both medically and financially, is the best way to ensure your plans are adhered to.

2) What Happens if Your Spouse Dies?

If your plan is to leave everything to your spouse and you both die simultaneously, such an event could invalidate your will. Without a contingency plan, your state's laws will dictate how and to whom your estate is distributed.

3) Who Will Care For Your Children?

One of the most important reasons to have a will is to name a guardian(s) if you have minor children.

In a scenario where both spouses pass away and are survived by minor children, the court will appoint a guardian based on what it considers to be in the child's best interest. It is critical to name trusted and responsible relatives or friends as guardians and avoid the court process.

4) What If Your Spouse Remarries?

In many cases, the surviving spouse is the primary beneficiary of the deceased assets. If somewhere down the road, the surviving spouse eventually remarries, how might that factor into your estate plan?

A surviving spouse may not be able to protect the assets as you intended. Particularly as we age there can be vulnerability to strong influence. Protections are often embedded into the estate plan that provides your spouse with access to the resources during their lifetime, and also protects them against mishandling or abuse.

5) What Are Your End of Life Wishes?

When given the opportunity to consider these questions, most people are adamant in their response. They either want all possible measures taken to stay alive, or they want no measures taken at all. Either way, it's a kindness to spare your family members the anguish of guessing by making your preferences known. This is typically done through a health care directive.

6) Who Makes Decisions If You Are Unable?

There comes a time for many people when they no can no longer make sound decisions. Often, one spouse acts on behalf of the other. However, it's also important to prepare for the possibility that you will be on your own in the future. A Power of Attorney allows you to appoint a family member or trusted friend to handle your financial affairs if you are no longer able.

7) How and When Should Your Family Be Informed of Your Plans?

We know, this is a very uncomfortable subject. However, the alternative—leaving them to guess your wishes and without direction, almost always turns out badly - even in the closest of families.

The issue is that most plans don't adequately prepare the heirs to receive and manage the assets. While you can't control the decisions your heirs make after you die, leaving them with little or no guidance leads to confusion and more grief. Your plan might be very clear on how your estate is to be distributed, legally, but they can't clearly communicate your vision and goals. Many families enlist the help of their estate attorney or wealth manager to facilitate the discussion and ensure that both the tactical and emotional components of estate transfer are given equal attention. We have several books, journal prompts, and other tools to aid in this area.

In a perfect work, the family is made aware of your plans, for end of life, medical and financial issues, and legacy planning, well before there is a family crisis. This allows time for thoughtful planning, revisions if necessary, and in our experience, a significant sense of relief for all the decision makers.

It's Not Easy to Be Fully Prepared, but Planning Helps

It's a fool's errand to think we are ever truly prepared for the magnitude of loss, disability, or the circumstances under which an estate plan is needed. However, having these difficult conversations with loved ones ahead of time can help make emotionally turbulent times less devastating.

Whether you’ve designed an estate plan that needs some attention or you’re just getting started, the advisors at Northstar are here to help. Schedule a complimentary Initial Conversation with one of our Wealth Managers to learn more about our comprehensive wealth management and transition planning services for women and their families in the greater Southern New Hampshire area and abroad.

Written by Kristina George in collaboration with Lexicon Content Development

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