Financial Freedom Tips (Video) – 4 Essential Steps for Estate Planning

Estate Planning - Make sure your family is protected.

Watch this 4-minute video to learn what you can do to protect your dependents and heirs from additional suffering, while also ensuring that your medical and financial wishes are honored. Estate planning is essential.

I’ve helped families through the loss of a loved one who did not have an estate plan. My motivation is to help your family avoid this painful experience.

Full Transcript of video

Hello, I’m Josh Duncan with SCB News bringing you this edition of Financial Freedom. The purpose of Financial Freedom is to provide tips to help you achieve financial freedom for personal significance.

Estate planning is a foundational component to financial planning and should at least be considered by most adults. However, discussing death and last wishes can create emotions in us we would rather avoid. Estate planning is about more than determining who will get your property. It includes how assets will be accumulated, preserved, and dispersed both during life and after. Additionally, determining how dependents will be cared for is included.

In this short video, I’ll give you an overview of four major areas of estate planning. Although I will be briefly reviewing these areas, my goal is to share information and not overwhelm. My motivation comes from helping families who lost a loved one without an estate plan.

The first area I’ll cover is determining how your money and property will be dispersed upon your passing. Two ways this can be handled are by listing beneficiaries on your accounts and holding property in joint with rights of survivorship. However, other property will have to be listed in a will or trust to ensure it’s distributed per your wishes.

A will is a document that directs the disposition of your property at the time of death. To be effective, a will must be executed according to state law. The key here is that a will does not go into effect until death. Property covered by the will is still subject to the probate process.

A revocable living trust is used when someone wants to remove money and property from their ownership while living to avoid probate and minimize estate taxes. Revocable means the trust can be changed during your lifetime. Therefore, there is no special tax treatment for the trust. There are multiple types of trusts and this is just one kind.

Next is determining who should act on your behalf should you not have the capacity to do so. The document that gives this legal authority is a power of attorney. Many people create this document to go into effect if they enter a state where they cannot handle their own affairs. The person acting on your behalf can be given authority of all your affairs or only specific transactions.

The third area is determining your wishes surrounding future care in the case of severe medical situations where you cannot communicate or make decisions. This is handled in an advanced directive where you give authority to a proxy to make decisions on your behalf. The proxy is typically a spouse, family member, or friend. The advanced directive can also state specific wishes for life support, burial or cremation, and organ donation.

The final area to consider is the care for your dependents. This is typically for children who will need a guardian until they are able to take care of themselves. You can name the guardians of your choice. Additionally, you can determine when any inherited assets will be distributed to them. This can be over time, certain percentages by age, or any option you choose.

These are four common areas of estate planning that cover many people. If you have not made time to review these areas of your life, please do so. A friend who owns a funeral home helped mold my thinking about estate planning. He said, “Planning for what happens after we’re gone is not for us but for our heirs.”

There are financial planners and estate attorneys available who can help you through this process. They should take the time to learn about your situation and plans before implementing any strategies. No two families are the same. Fear commonly holds people back from estate planning. Be encouraged to carve out the time for this planning.

Thank you for joining me for Financial Freedom. I'm Josh Duncan, Financial Advisor with F5 Financial Planning, helping you achieve financial freedom for personal significance. Please contact me here to send topics you would like me to cover. See you next time.

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