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Why Estate Planning is a Key Part of a Solid Financial Plan

Why Estate Planning is a Key Part of a Solid Financial Plan

June 01, 2020

If reviewing your estate and financial plans has been top of mind lately, you’re not alone. Living through a crisis like COVID 19 puts everything into perspective, and shines a light on both financial matters and arrangements made for the future. It may not be pleasant facing these realities, but it's a necessary part of being prepared for unexpected events and enjoying the confidence that comes with having an established estate plan in place. 

A core part of financial planning encompasses estate planning. Your attorney should have the full picture and be aware of, and working within, your financial goals. There are multiple tools found in an estate plan to consider: a Will, Living Will, and the Power of Attorney. Let’s break each down from a high-level. 


Most everyone is familiar with what a will is: a document that establishes how money and property will be distributed upon death. In the most basic terms, it stipulates “who gets what.” This may include not only individuals but also organizations, charities, and religious institutions. In contrast, a will can also specify who should not be a recipient of estate assets. Other considerations around creating a Trust, or designating an Executor to manage the transfer of assets, should be explored with legal and financial guidance.

Passing without a will in place is known as an “intestate” estate.  This means that the distribution of estate assets is determined by state law and not by the decedent’s wishes.  This will result in a very different outcome than you may actually want unless state law is aligned with your intended estate plan.  If no relatives exist, then any estate assets may “escheat” to the state. Regardless of your circumstances, working with an attorney to draft a will that reflects your wishes on how your hard-earned estate will be distributed is extremely important.

Living Will

A Living Will is a document, or set of documents, related to a person’s healthcare decisions. Healthcare workers are required by law to provide all life-saving measures to patients regardless of their state. In the event you cannot communicate, this document instructs medical professionals what treatment and/or medical procedures not to perform. For example, depending on a number of factors, a patient may not want to be kept alive in a vegetative state through the use of a feeding tube indefinitely. Designating someone you trust (with your life) also known as a “healthcare agent” is a common addition used to further direct doctors. Again, life-saving and potentially life-ending decisions should be made in coordination with your attorney and closest family or friends.

Power of Attorney

The Power of Attorney (POA) is another important document in which someone (the “principal”) legally empowers another (the “agent”) to act on their behalf. Choosing the right Agent is critically important to avoid any potential abuse or misconduct. The focus of a POA can be very narrow and only pertain to certain transactions, or very broad and pertain to virtually any decision. The most common form of POA is known as the “General Durable Power of Attorney” which provides expansive powers. For example, if an elderly person becomes incapacitated, a child in possession of a General Durable POA can transact fully on their behalf. Without the POA, carrying out basic tasks, like going to the bank, would be near impossible. This is another vital decision to be made in the context of estate and financial planning with the guidance of a trusted professional and the ones closest to you.

Estate planning requires careful consideration and forethought. Meeting with a well-established estate planning lawyer that can correctly handle your unique situation will result in peace of mind. Doing so in tandem with your financial planner and aligning all your goals is key to your assets being passed on in accordance with your wishes.