Written by Connor MahoneyFinancial Representative at Mahoney Asset Management

Even for those who don’t consider themselves to be wealthy, estate planning provides the opportunity to designate, among other things, those to whom you would like to leave financial or personal possessions to, those who can act on your behalf and those who will act as a guardians for minors. Some other considerations include planning the succession of a business, providing for those with special needs who receive government assistance or for those who poorly manage money, and having insurance to provide for survivors, funeral expenses and debt. There are multiple important documents you should have in place as follows.


A will is defined as a “legally enforceable declaration of how an individual wants his or her assets to be distributed upon their death.” A person who dies without a valid will is said to have died ‘intestate’, and when this happens, the distribution of property and assets are left up to the government and in some cases, property and assets can end up property of the state. If you don’t create a will, your state of residency will essentially create one for you, and it probably won’t distribute your assets in the way that you would have liked them to be distributed. When preparing your will, you need to designate an executor who is responsible for managing the distribution of your assets until completed, which amounts to the payments of debts/expenses and filing of tac return(s). The executor should be one or more persons, or an entity like bank that you trust to fulfill the role.

Living Will

A living will describes and instructs how an individual would or would not wish his or her end of life care be managed. This document serves as an advance directive that takes effect when an individual is considered to be terminally ill, seriously injured, or near the end of their life. Advance directives are written instructions regarding medical care decisions to be made by an appointed person if you are unable to communicate such decisions yourself. Not only does a living will allow you to dictate your medical care when you are unable to, it can also relieve your loved ones or guardians of having to make difficult decisions at a time of crisis

Power of Attorney

A power of attorney gives one or more persons the power to act on your behalf as your agent. The power may be limited to a particular activity, like the sale of your home for example. The power granted may also lend itself to other things like handling all personal, financial, and business transactions. The power may give you temporary or permanent authority for someone to act on your behalf, whether it be immediately or only upon the occurrence of a future event. If you do not have power of attorney and become unable to manage your personal or business affairs, it may become necessary for a court to appoint you one or more people to act for you. Depending on the state you live in, people appointed this role are referred to as guardians, conservators, or committees. If a court proceeding, sometimes known as an intervention, is needed, you may not have the ability to choose the person who will act for you. Few people want to be subject to a public proceeding in this manner so being proactive to designate a power of attorney and defining their ‘powers’ is important 

Letter of Intention

While not legally binding, a letter of intention is a practical and personal way to leave information and instructions. It may include specifics about what to do with your remains, type of memorial service you want, and where certain possessions may go. It may be more general in nature and include people that you have shared memories with or those you have been close with throughout your life.

Revocable Living Trust

Established in writing and involves the trust maker, the trustee, and the beneficiary. In a typical situation, when the trust agreement is created these three people will be the same person. Once the trust is signed, the trust maker funds the trust with his or her assets and designates the trust itself as the beneficiary of retirement accounts, life insurance, annuities and any other assets. The trustee then manages, invests, and spends the trust property for the benefit of the beneficiary

All of the documents discussed should be addressed as you approach retirement. It is advisable to avoid the process of probate, not only because the process of administering an estate can be very lengthy but also because most states asses probate fees which can be as high as 5% of the estate value, if not higher. In addition to probate fees, there are attorney fees, court fees, appraisal fees, and account fees to consider which you will not want your beneficiaries to have to face. Another thing to consider is estate taxes which consists of accounting of everything you own or have certain interests in at your death. 

It is certainly a good idea to put together a ‘team’ including estate planning attorneys, a certified accountant with tax estate planning experience, and a licensed financial advisor to ensure all your directives are carried out to your wishes. Estate planning requires regular reviews taking place every one to three years. 

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