*This post was written as part of Financial Friday over at denverparent.net and posted at Denver Parent but re-posted here.  Happy Friday to you all!

In my previous Financial Friday articles, I have talked about insurance, taxes, deductions, and how to save, and health savings plans.  This is all great for the NOW but few of us like to think about what happens after we are gone.  Few of us want to think about the unexpected but do you have a plan of who will raise your kids if something happens to you and your spouse?  What about your money that you saved? What happens to that?  Will your children be left with debt or assets in trust or in the hands of a good investor?

Few of us like to think about estate planning because it brings up a morbid thought- we are going to die.  Yes, it is morbid and it is easier to put it off but take the example of Jim and Sue who had three young children (all under age 10).  Jim and Sue took a trip without the kids and met with an unfortunate accident while overseas.  They died leaving 2 homes (real property), over  $500,000 in cash/money market/stocks/investments/pensions and the like; but no wills.  The kids’ guardians were chosen by the court.  Of course, Jim and Sue had no say in it.  They were gone!  The court appointed an executor to distribute assets and a trustee but again, Jim and Sue may not have wanted Sue’s sister to care for the kids.  Jim and Sue may not have wanted Jim’s brother to manage the kids’ assets.  And most of all, Jim and Sue did not want to pay the outrageous probate costs they could have avoided (paid out of their estate) all if they had just had a will.

This article outlines the basic facts of estate planning.  In subsequent articles, I will get more in depth on some of these topics.

Myth #1- I do not need a will because I have no assets.  Everyone has assets and net worth does not determine whether you need a will or not.  Every individual should have a will to set out wishes, goals, and desires of how your personal and real property is distributed.  In addition to a will, you should also consider other instruments like a will, powers of attorney (POAs), and a living will.

Myth #2- I already have a living will, that should be enough right? A living will is just one piece of the estate planning puzzle.  A living will tells the healthcare provider only about whether you want life sustaining measures taken or not.  A health care or durable power of attorney actually appoints someone to make health care decisions for you.  Health care decisions include the power to consent, refuse consent or withdraw consent to any type of medical care, treatment, service or procedure. In the document you can give specific instructions regarding your health care which will require the agent to make decisions in accordance with your direction. Additionally, you can do a general power or special power of attorney for someone to manage your day to day affairs while you are incapacitated.  That is separate from the estate planning puzzle but it is a good idea to include this power of attorney in case you need long-term care or cannot write checks/pay bills during your hospitalization.

Myth #3-  I do not need a will because I am single without kids.   Again, even if you are single and without children, it may still be a good idea to have a will so you can decide who gets your baseball card collection, your jewelry, or other items and home.  Also it reduces the cost of probate if you have a will so the court does less work.  When the court does less work, your heirs or beneficiaries pay less probate costs.  Everything written in one place makes it easier to locate your heirs, your beneficiaries, and the people you designate to be the executor or trustees of your estate.  That is why it is a good idea to put wish lists/names and phone numbers etc with your will as well.  Just a smart idea.

But, before you run off and make these documents, you should make a plan for the care of your children, gather documents, and talk with the people you are thinking of appointing as well.  Your assets include your real property (homes, condos) and also investments, retirement savings, insurance policies, and business interests, along with all your tangible property (Cars, jewelry, TVs, collectibles, etc.).  The more of your items like insurance, retirement policies, and your bank accounts, etc., that can be joint accounts or name Payable on Death (POD) beneficiaries the better.  You can avoid probate of those items by designating the PODs on the account itself.  In any case, everyone should have a will and especially if you want to ensure your kids are cared for by the people you choose not who some court judge chooses.

Myth #4- It is too hard to do this work and I do not want to pay a lawyer.  These days you may not have to pay a lawyer or go see one but it is a good idea to do so.  Your individual circumstances differ from Jim and Sue’s above and you may need specialized assistance.  You can certainly do a will or living will or trust using software or on-line help but it is a good idea to see someone with expertise in the field and it does not have to be a lawyer.  There are estate planning experts out there to help you.  And remember, you should do this leg work now because you do not want to wait until it is too late.   There are lots of websites or resources to find lawyers near you.  You can either use findlaw.com, google search, the phone book, and they are often listed by specialty.  Most lawyers who work in this field do not charge exorbitant fees, and are quite reasonable . Call around and find out if initial consultation is free as well.  You can also look at your State’s bar association website.  For those in Colorado, the Colorado Bar Association is a good resource as well.

And finally, once you have all the documents mentioned above, do not make too many copies in case you make changes in the future because conflicting copies of wills and powers of attorney can result in disputes.  Secondly, keep them in a safe place but not in a safe deposit box.  A safe deposit box at a bank or financial institution is sealed and only opened as part of probate so if your will or other health care documents are in there, your heirs and beneficiaries will not be able to go retrieve them.  Keep all your documents in safe, fireproof place at your home, easily accessible by your appointed executor(s) or guardian(s) and let them know where it is.  Additionally, always let people know you are appointing them and make sure they are okay with it.  The last thing you want is an unwilling executor, or agent in charge of health care decisions for you, OR WORSE, unwilling guardians for your young kids.

Next time we talk about Estate Planning as part of Financial Friday, I will talk about trusts and if they are right for you.

*Disclaimer: All parts of this series were written by the author in her personal capacity and not attributed to her profession, or any organizations, employers, or the like that author is affiliated with. The author is interested in these topics and blogs for recreational purposes and not for financial gain. All views and opinions are of the author and not attributable to any company and not meant as an endorsement to any company or organization. Most importantly, author is not a financial expert, tax or estates attorney, estate planner, or accountant, nor works in the financial planning field. This article is written solely for the purpose of sharing information and knowledge with the readers. All readers should consult with their own attorney, tax planner, financial or estate planner, and/or accountant prior to making investment decisions. The author is not liable and will be held harmless for any investment loss or risk undertaken as a result of opening any of the accounts aforementioned or preparing the documents there in.