Is your estate in order? Five things you should know

Make a will? There are probably a billion other things you’d rather do — like clean the gunk from a clogged drain or drive across town on game day. 

It’s not just you. In fact, 67 % of Americans don’t have a will. An estate plan protects both your loved ones and your property by allowing you to choose what will happen if anything happens to you. It also protects you if you become incapacitated during your life, since you’ll get to choose who will make decisions for you. 

Ready to suck it up and start planning? Here are five things you need to know: 

1. It’s not just for wealthy people 

Think estate planning is just for people with large fortunes to hand down? It’s a common mistake. But estate plans are for everyone, regardless of how much or how little money or property you have. And without a will, the loved ones you leave behind have less control over the things you leave behind. 

2. It’s more than just a will 

For most people, estate planning means deciding who will inherit their property. But there’s much more to it than that. If you become incapacitated during your lifetime, for example, an estate plan lets you decide ahead of time who will manage your finances and make health care decisions for you. It also determines how your children will be cared for. 

The foundation of an estate plan generally consists of four main documents: 

• Medical information release form. This allows health care providers to share information with your family if you’re in the hospital.
• Health care proxy. This identifies who can make health care decisions for you if you’re not able to do so. It remains dormant until activated by your doctor.
• Durable power of attorney. If you need help with your finances, this identifies who can pay your bills, file your tax returns or sell your real estate.
• Will. This outlines how your property will be distributed. You can allocate your property in percentages or designate specific dollar amounts. 

3. An estate plan makes things easier for your family 

If something were to happen to you, how would your family take care of your pet — or your children? Pay your mortgage? Cover your funeral expenses? An estate plan not only designates the person you want in charge of your affairs, but it empowers them to fulfill your financial obligations. 

Without an estate plan, your family would need to: 

• Go to court. When someone dies without a will, the estate goes into probate. The family needs a court order to access any of the funds.
• Pay probate costs. Probate court is expensive. Plus, the family might incur legal fees if they need to dispute the court’s ruling.
• Wait for months. It can take months or even years for the case to resolve. In the meantime, the family won’t get any funds to pay for funeral expenses or other obligations. 

4. Your estate plan needs updating 

An estate plan isn’t something you “set and forget.” It’s a living document that should evolve as your life unfolds. Whenever a major life event occurs, it’s a good idea to review your plan and make sure everything is the way you want it. For example, you may want to make changes if: 

• A new member is added to your family
• A family member gets married or divorced
• Your children grow up
• Your assets change in value
• There’s a death in the family
• Tax and estate laws change 

5. Talking to your family is important 

Creating an estate plan is just the first step. Once you’ve made the important decisions, your family needs to know what to expect. It’s an uncomfortable subject for most people, which is why we’re often reluctant to talk about it. But it’s best if you communicate your wishes directly so your loved ones won’t face any unpleasant surprises. 

Regardless of how wealthy you are, an estate plan helps ensure that the people you love and trust are making the decisions in your absence, not the courts or current laws. You are in control of your life now. Making an estate plan will help you remain that way, even after you’re gone.