Researching and selecting the right insurance policies is a huge step. I’m proud of you for managing your risk! Protecting against life’s unexpected (but inevitable) speed bumps prevents an accident from stealing your hard-earned wealth.
However - we’re not quite finished managing our risks. I know, I know, this part isn’t very fun. But it is important, as anyone who has unexpectedly lost a partner or dealt with an incapacitated loved one will tell you.
Do you have a will? With a will, you can document many important decisions. You can name who will serve as the executor of your will. If you have children, you can identify guardians. However, minors cannot inherit, so assets intended for young children will be managed by the court in their name - not by their guardian. Wills also become public documents when they are filed in court, upon death.
Is a living revocable trust right for you? A trust isn’t just for the uber-rich and can be a very useful tool to ensure your assets go where you intend. It works like a financial briefcase - it holds assets you accumulate throughout your lifetime, and can be accessed by the people you choose. A revocable trust does not need to be filed in court (unlike a will) so the settlement and details of the trust remains private, assuming it is not challenged in court.
Do you have an advance healthcare directive? If you are incapacitated, a medical directive can provide valuable guidance to healthcare providers and empower trusted individuals to carry out the care you wish to receive. Medical directives received tremendous press during the Terri Schiavo case.
Do you have a durable power of attorney for finances? This allows you to empower someone to manage your money in the event you are unable to do so for yourself.
Whew! That’s a lot of information, and it’s not fun to think about. But - consider the additional stress you’d feel if your partner or family member passed, and didn’t have this documentation in place. Determine which of these is right for you, and seek out an estate attorney to put the right legal agreements in place to manage your risk and preserve your wealth. Your costs to create these documents will vary based on legal needs, attorney fees, and many other factors, but the costs I see generally range from $750 - $4,000 in the US.
What legal protections have you put in place? How much did it cost you to create your legal plans? And thank you for adulting with me to explore this important topic.
xoxo, Ms. Financier
This post, like everything on this website, is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect your legal situation.