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Kicking off your Estate Plan

Updated: Apr 24

Follow these tips to kick off a plan for who gets your house, jewelry, dog, and more after you pass 



Follow these tips to kick off a plan for who gets your house, jewelry, dog, and more after you pass 


Disclaimer: The information provided is not intended as tax or legal advice and may not be relied on for purposes of avoiding any federal tax penalties. We encourage you to seek specific advice from your personal tax or legal counsel.



When you hear “estate planning,” you may think of your parents, or even your grandparents. But, anyone who has assets—like a car, a house or condo, jewelry, even a furry friend(!)—or dependents—like a child or an elderly parent living with them—should consider a plan for who will get these assets and care for these dependents after they pass. 



At what age should you consider an estate plan?


It’s easy to think that, if you’re young, you have plenty of time to get your end of life plan in order. And, hopefully, you do! But, to be on the safe side, we recommend you consider your plan sooner rather than later. After all, what could it hurt? 


Did you know that, if you don’t have a formal estate plan, your assets typically will go to your next of kin (like your parents, children, or family members) and the state gets to determine the specifics!? That means that your precious heirloom jewelry from your great grandmother or the collectors’ baseball mitt you spent a small fortune on wouldn’t go directly to your best friend, sibling or cousin. Nope. The state gets to decide. And your furry friend? He could end up at shelter. Not to mention your children, if you have them, would be left to the courts to determine who would care for them. 


Not to worry! Now that you know why it’s important to have an end of life plan at any age, old or young, we’ll walk you through each item to consider in your estate plan, and which next steps to take to get your estate plan in order. 







What is included in an estate plan?


General property


Everything in and around your home, including furniture, jewelry, car, electronics, fancy guitar, art, china—everything! 




Consider all of the money sitting in your retirement accounts, including your 401(k), 403(b), ROTH IRA, or Traditional IRA.




This could be the one from your employer or one that you purchased yourself. They both count toward your estate. 



Pets


It might be strange to think of it this way, but, yes, your sweet fur baby is part of your “estate.” Planning for your little furball (or turtle, goat, snake—whoever you took in as your bestie) means naming a caretaker—or perhaps a handful of optional caretakers—and leaving money aside for their care. If you don’t have a plan for your pets, the state could very well turn them over to a shelter.




While they’re not “assets” like your car or your computer, your children are considered part of your estate as your dependents. And, it is your responsibility to name a guardian for your children if anything were to happen to you. Having a clear, written plan for your children and dependents in your passing can help avoid a costly and time-consuming battle in court over who would get to care for them especially if both are parents gone. 



Digital Footprint


Have a secure place where you store your accounts and passwords for all of your online accounts—whether that’s your Amazon account or your Facebook account. That way, whoever takes over your assets will be able to properly wrangle, manage, and close down your digital assets. 



Why do you need an estate plan? 


There are many reasons to have an end of life plan. The top of the list is that, unless you specifically say so within your will or estate plan, the state gets to decide who gets your assets, accounts, pets, and children. In fact, most states automatically pass on your estate to your next of kin such as parents, if they’re still living. That may mean, that your significant other, best friend, sibling, etc. has no say! If your parents are no longer around, the distribution of your assets will go to the court. 


If you have a significant other or partner but don’t plan to marry, you especially need to plan! Typically, when married and you pass away, your assets will pass directly to your spouse. But, if you haven’t made, or never planned to make your relationship official (according to the courts, at least), your significant other or partner does not have a say in the distribution of the assets in your name. There can be even further complexity if there are assets that you co-own.



Your plan of action 


It’s time to get your plan in place! Don’t worry. You can take this process in chunks. It doesn’t have to happen all at once. (But, as we just shared, it’s still incredibly important to get done!) 



Psst, log onto Pocketnest to walk through your assets.



Power of Attorney


A power of attorney makes legal and financial decisions on your behalf and acts based on the scope of authority and under the conditions you have given them



Healthcare


If you’re ever in a position where you can’t make medical decisions for yourself (e.g., perhaps you’re in a coma), the following three documents can help so you’re well cared for by someone you trust. 



Living Will


A legal document that explicitly states your wishes in regards to medical treatments and decisions


Healthcare Proxy


Grants authority to someone you trust to act on your behalf. Heads up: we recommend you talk to this person ahead of time! This isn’t the type of thing you want to spring on someone. You’ll want to have a tough conversation and make sure that they would be able to make difficult decisions on your behalf—despite the pain, sadness, and fear that could accompany the situation. 



Last Will and Testament

 

This document designates who will get your estate after you pass. This includes your home, car, electronics, pets, and children. 



Beneficiaries 


As you consider your plan, an important step is to formally "name" both beneficiaries and contingent beneficiaries of your investment and retirement accounts. A beneficiary is the person who you name to receive the assets for that specific account if you pass. The contingent beneficiary is named if the primary beneficiary is no longer living. A beneficiary can be added to a account typically through a form that your financial institution, custodian or broker dealer would give to you to complete and sign. This can include your retirement accounts like your 401(k), 403(b), Roth or Traditional IRA, your life insurance, and, potentially your bank accounts (often through a transfer at death (TOD) form.



Get the counsel you need


Your estate plan is something that will require lots of thought and consideration. While it’s incredibly important to complete—and, sooner rather than later—it’s something that requires careful planning and a place to bring in the professionals. This isn’t the kind of thing you can quickly do in between Netflix episodes. While you can certainly do it in small pieces—and we recommend you do it that way, so as to not get overwhelmed—we encourage you to consider your options, sleep on your decisions, and discuss them with your loved ones. 




Link your accounts and organize your assets. We'll help you tidy up your estate plan needs and get them ready for your professional.



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