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After hearing the tragedy of Prince’s death on April 21st, it has recently been discovered that he also died with no Will…

 

Organize your estate before it’s too late

Using Prince as an example, we wanted to take a moment to touch on why you should organize your estate before it’s too late.  Estate planning doesn’t necessarily mean that you have wealth stored away in multiple places. Estate actually refers to you as a human being and all that you own, occupy and love, even if it’s just your little kitten Noodles.

Allgen’s Path to Financial Freedom contains 3 life stages (Foundation, Formation and Freedom) each with specific steps to take to reach financial freedom.  In the foundation stage we suggest getting a simple will. Below we are going to cover the essential documents you’ll need to get your estate organized in an unexpected event that you pass or become unable to make decisions for yourself. Your Last Will and Testament applies upon your death, while a Living Will, Healthcare Power of Attorney, and Durable Power of Attorney applies while you’re still living.

 

Last Will and Testament

Whether you pass away unexpectedly or after a long full life, the Last Will and Testament will set forth your wishes upon your death. This legal documentation gives clear instructions as to what you want to do with your Estate (all that you own) after you’re gone.  You can set up your Will once you turn 18 years of age.

Below are a few reasons as to why having a Will can save a lot of heartache and trauma.

  1. In the case that you don’t set up a Will before your death, the state gets to decide what to do with your estate. This means that your assets may not end up where you intended them to be. Even if you have no assets, you can set up a executor who is responsible for closing any accounts or transferring titles(i.e. car), last paycheck, closing out Social Security,  to whomever you choose.
  2. You’ll be able to set forth beneficiaries to inherit what you’ve left behind. Whether that’s your children, siblings, parents, or favorite charitable organization, it is clearly stated where you desire for your estate to go.
  3. You can appoint guardians over any children who are minors. This leaves clear direction as to who will watch over your children until they become of age. This will save your family the turmoil of having to fight for the children in court and against each other.

 

Living Will

A Living Will gives clear direction on what to do for you should you become incapacitated and are unable to communicate. These are decisions such as continuing on life support if you’re not expected to recover from your incapacitated state. In the event that you do not set up a Living Will, decisions are made on your behalf by the State you live in. In a hypothetical event that you have brain trauma and are unable to communicate, your Living Will can lay out your views about being kept alive artificially. This would help your family and medical personnel make a decision on what to do for you.

 

Healthcare Power of Attorney

A Healthcare Power of Attorney is appointed to make medical decisions on your behalf when you are unable to make decisions for yourself. This would be your healthcare advocate that the doctors and medical professionals would refer to concerning any medicines and procedures.  If you were in a coma, and the doctors needed to administer medicine to you that you were allergic to, your Healthcare Power of Attorney can step in and let them know.

 

Durable Power of Attorney

A Durable Power of Attorney has full power and authority to act on your behalf. This would go into effect should you ever need to pay for sell your home, make deposits, pay your medical bills, etc. while incapacitated. This is a powerful document and should be not taken lightly. Let’s say that you are in an accident and you’re hospitalized. The Durable Power of Attorney allows the attorney-in-fact to withdraw money out of the account to pay rent, car insurance, phone bill etc. while you’re recovering.

 

After reading all of the information above, you can see why getting your estate in order is so important. It doesn’t hurt anything to set it up, but it hurts tremendously if you don’t have your estate organized.

 

Wow. This is good information, but where do I start?

If you’ve read through this article and it’s motivated you to get your estate in order, we suggest:

  1. Get organized– The beginning to an effective estate plan is knowing what you have and how you want things to play out
  2. Seek guidance from a professional – While it is possible to be a DIY’er in planning your estate, the various details involved in this process do warrant professional guidance. We suggest you interview a few different estate planning attorney’s so as to find the best fit for you.

Give us a call if you need additional guidance. Thanks for reading!

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Advisory services are offered through Allgen Financial Advisors, Inc., a registered investment advisor.

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