Money Mindset

Chapter 8 Estate Planning

In this chapter, we’ll talk about transferring the assets we don’t use during our lifetimes to loved ones and/or other beneficiaries.

Estate planning, in its simplest form, could be defined as how you want to transfer your “stuff” after you’ve passed away. Leaving a legacy and giving heirs the best platform to succeed in their lives is a meaningful estate planning goal. But, remember what Warren Buffett, one of the world’s richest men, said when he was quoted in Fortune magazine in 1986: “One should leave enough money to your kids so they can do anything, but not enough so they can do nothing.”

Assets pass at death by contract (e.g., beneficiary and transfer on death designations), by law (e.g., beneficiary deed, joint accounts, trusts), and through probate (e.g., testate, or “by will,” or intestate, or “no will”). Every adult, whether they have a high net worth or a balance sheet that is negative, has something they want to pass down after death (sometimes it is only their values, not their valuables; sometimes it is both their values and their valuables).

Simple Estate Planning Documents

Every individual, regardless of net worth, should consider having these four documents:

1. Last will and testament
2. Durable power of attorney
3. Living will (a.k.a. health care proxy, advanced directive, medical power of attorney)
4. Ethical will

Last Will and Testament

A last will and testament states an individual’s wishes. Everyone should have one of these. A last ...