The third step in your do it yourself financial plan is estate planning. Estate planning is thought about as wills, trusts, and gifts, etc. Not anymore. No one wants to think of sickness, old age, and death, yet all of us will experience that at some point, and the most important element of a person’s legacy is not money but passing along values and life lessons. Yes, the basic documents of an estate plan which are needed to build wealth are a will, durable power of attorney for financial care and durable power of attorney for health care. But now people want so much more. They want to know how the final wishes and preserved memories of the individual will be left behind. Here is the new softer side of estate planning:
Ethical Wills-more people are using this type of will not just to distribute assets but to also put their values and beliefs on paper. Even if you are not the best writer, you can find outlines and examples on the web to get you started on what memories, beliefs, values, or life lessons you would like to leave behind.
Durable Power of Attorney for Financial Care is a document that gives someone the authority to take over your financial matters upon your disability or incapacity. Make sure that the individual you choose is aware of his or her duties. I have found too often that one child who is not financially savvy is given the responsibility that he or she did not want. Don’t surprise people with this responsibility. Talk to them first to see if they are open to being appointed for these duties.
Durable Power of Attorney for Health Care is a document that gives someone the authority to make medical decisions for you upon your disability or incapacity. 85% of most DNRs (do not resuscitate) are not honored. Again, make sure the individual you choose knows of his/her obligation to see that your wishes are honored.
Some of the new advanced medical directives like the Five Wishes available at Aging with Dignity offer a more detailed medical directive which is easy to understand and use.
Passing along “values and life lessons” was overwhelmingly considered (by over 75 percent) the most important element of a person’s legacy according to a recent study. Don’t wait to execute these documents under duress. To build wealth, you have to preserve what you accumulate over the years. Plan your legacy today for the protection of your assets and your family.