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Estate Planning

Hi, I'm Matt Daley. Thanks for tuning into the Financial Success Academy.

In this episode, we will discuss estate planning and the critical role it plays in your financial plan.

Estate planning is much bigger than just "who gets my stuff?" The foundational documents that make up your estate plan are a will, guardianship directives, medical directives, medical powers of attorney, and financial powers of attorney.

A will is crucial in helping your wishes be clearly understood and can make it easier for your loved ones to handle day-to-day affairs once you're gone. Your will specifies how your estate, including all property and assets, will be distributed after your death. If you die without a will, a judge will apply the laws of your state regarding the distribution of your assets. Dying without a will forces the probate court to make decisions about how to distribute your assets. In some states, this can take long periods of time, be costly for your state, and your assets may not pass according to how you intended.

Many people also have life insurance policies, retirement funds, and other accounts with a named beneficiary. The beneficiary, let's say your spouse, won't have to wait for probate to make decisions regarding the distribution of those assets. However, it's very important to check your named beneficiaries and ensure they are up to date. This is especially true after major life events like marriage, age, death, or divorce. Will or no will, a probate court judge still has to validate these documents, so no one completely avoids probate. The process, however, is much easier with them in place.

If you live in Washington State and the value of your estate is greater than approximately $2.2 million, your estate may be subject to additional state taxes upon your passing. More complex planning may be required.

If this applies to you, give us a call and let's discuss your options.

For those with legal dependents, an important piece to include in your will is guardianship directives. These directives outline who you would want to become the legal guardian or guardians of your dependents should you pass. This avoids a judge making that decision for you.

Your medical directives are written legal instructions regarding your preferences for medical care if you're unable to make decisions for yourself.

Advanced Directives guide choices for doctors and caregivers if you're terminally ill, seriously injured, in a coma, in the late stages of dementia, or near the end of life. Advance directives aren't just for older adults. Unexpected end-of-life situations can happen at any age, so it's important for everyone to prepare these documents.

Your medical power of attorney gives a person legal authority to execute those decisions on your behalf, should you be unable to do so for yourself.

The same is true for your financial power of attorney. However, that authorization pertains strictly to certain financial transactions.

You may already have these documents in place, but do you know where they are? Does your named executor or trustee know where to find these documents? Do they have the code to your safe? When was the last time they were updated? Perhaps your wishes or circumstances have changed.

Our lives are dynamic, and circumstances change often. Take the time to do a quick review to verify that no updates need to be made.

We recommend discussing your wishes and creating these foundational documents with a competent estate planning attorney. Should you need a referral, please reach out to us, and we can help facilitate an introduction.

We hope you found this video helpful. Stay safe, and thanks for tuning in.