Estate Planning

Estate Planning - An Essential Guide

Your estate encompasses everything including your Netflix account, car, home, bicycle, bank account, investments, life insurance, furniture and pets. In fact, all your assets and personal possessions - no matter the value - are part of your estate. 

What happens to your estate when you die is determined by your level of estate planning. 

To make sure you are prepared for anything, Memories has pulled together everything you need to get started with estate planning. 

Estate Planning

What is estate planning?

Estate planning involves documenting your wishes for the transfer of your assets for when you pass or if you are unable to communicate your wishes yourself. 

The benefit of estate planning is the ability to limit taxes and legal costs when transferring ownership of the estate. 

It should start with a will or living trust, but can also include preferences for medical care and treatment should an event arise where you are unable to communicate. 

Estate planning can also include a knowledge transfer of your phone and email passwords; information about properties and deeds, health information, financial information, legal documents, and funeral arrangements.

Estate planning isn’t just planning the transfer of your goods, it also provides an opportunity to pass on your values, milestones and lessons learned.

What happens if you don’t have an estate plan?

If you die without an estate plan, your assets will be distributed according to a legal formula - removing control of who distributes your assets.

This means your assets might not end up with the person you would have chosen.

Even if you’re happy to have your assets pass according to the law, it’s not uncommon for the assets to end up with someone the person would not have chosen.

It's also important to avoid estate planning mistakes by ensuring it is continually kept up to date.

Will Preparation

Any good estate plan starts with a living will or trust

A living will is a legal document detailing your wishes regarding the distribution of your property and the care of any minor children after you pass. 

While the will provides your instructions, it does not avoid probate - a legal process sometimes required to validate a deceased person’s will in order for their wishes to be carried out by the nominated executor.

For these reasons, a revocable living trust is preferred as it can help avoid probate at death. It can also bring all your assets together into one plan.

A living trust also offers the added benefits to have your assets managed by the nominated trustee, until your beneficiaries reach the age you want them to inherit.

You’ll need to appoint a person to make decisions for you

A substitute decision maker can be nominated to legally make healthcare, financial or guardianship decisions on your behalf if you are unable to communicate.

There are different kinds of legal appointments that grant decision making powers:

  1. A medical decision maker can manage your medical needs

  2. A power of attorney can manage your finances

  3. A legal guardian controls your personal and property interests

Add health care directives 

A medical decision maker can manage your medical needs, but there are further steps that can be taken to make sure your end of life wishes are expressed.

As part of your estate planning, you should create an “advance care plan” (ACP) to detail your preferences for medical care and treatment should an event arise where you are unable to communicate those decisions yourself.

For added comfort, an 'advance care directive’ (ACD) communicates your preferences with family, friends and healthcare professionals. 

Always make sure your doctor and family are willing to follow your directives - some physicians may not follow directives if they disagree for moral or ethical reasons. 

Estate Planning Journey

Have you considered life insurance?

Life insurance is an important part of estate planning as it provides a financial safety net for you and your family. 

Having life insurance can help cover the cost of funerals or payout other large debts such as mortgages and business loans.

Get an understanding of estate taxes 

An estate tax is a financial levy based on the current value of assets. 

Federal estate taxes are levied on assets in excess of $11.4 million, but there are other states with lower limits. 

Assets transferred to spouses are generally exempt from estate tax.

Organise final arrangements 

Planning your own funeral can help ease the burden for loved ones. 

As part of your estate planning you could consider a prepaid funeral plan or set up a payable-on-death account at your bank that will transfer funds to pay for your burial/cremation and related expenses.

Be in control of your own life story 

Estate planning could extend to writing your own obituary or tribute, which would give you control of the way your life story has been told. 

A Memories Page provides another opportunity to preserve your digital legacy, with our private and secure platform designed to showcase your life story so it can inspire friends and family for generations to come.

Keep everything in one place 

Estate planning involves gathering all documents such as trusts, insurance policies, real estate deeds, certificates for stocks, bonds, bank accounts, mutual funds, usernames and passwords, and funeral arrangements. 

A Memories Page offers a vault to store all these important documents.