You are here: Home » Money Management » Bare Minimum Estate Planning

Bare Minimum Estate Planning

by Emily Guy Birken

After my aunt—who took care of her elderly mother and disabled sister—passed away suddenly at 52, our entire family scrambled to try to find the paperwork and insurance information that specified what happened to her estate. A death in the family is a stressful time, which is compounded when you add in financial uncertainty. It didn’t occur to my aunt that she would need to have her estate set up so young, but you never know what life will bring. Because of this experience, I’ve learned that one of the greatest gifts you can give to your loved ones is a well planned out estate.

Unfortunately, even with my family experience fresh in my mind and the recent birth of my son, finding the time to plan out my estate has not been easy. Day-to-day life always seems to get in the way. But getting the bare bones of your estate set up will take less time and money than you think. Here’s a guide to the bare minimum you need to make sure that your assets and family are taken care of:

1. A Will

Simple Estate Planning

When is the last time you updated your will?

I was horrified to learn that if my husband and I were to die intestate while our son was still a minor, the state would decide where he went, despite the fact that we have already discussed our plans with family. We needed to have a will to protect him. We learned that setting up a will was a very quick and easy process once we found a lawyer. We received a recommendation from our financial adviser, but you can also search here for will and probate lawyers in your area.

Writing our will began with a phone call wherein our lawyer determined our estate was valued at less than $5 million (which I assume meant she could use a simpler will template), and who our son’s custodian and our will’s executors would be. After that 15 minute phone call, our lawyer emailed us a pdf of the will that same day to check for typos or other issues. We signed the will in her office two days later, and my husband and I felt much more secure. The entire process took about an hour of our time (including the original phone call) and cost less than $200.

In the future, I hope to rewrite our wills to be more specific about the disbursement of our assets, but for right now, this is enough to protect us if the unthinkable happens.

2. A living will

It didn’t occur to me to ask for a living will in addition to our typical will, but our lawyer included it since it is a common and necessary supplement to your estate planning. Without a living will in place, your wishes could be disregarded should you fall into a coma and need medical intervention to survive. This could potentially have serious consequences for your family if they disagree about what you would want and if you do not have the money for extended medical care.

The lawyer who draws up your will should also be able to create a living will for you.

3. Sufficient life insurance

It can be easy to forget how much your life has changed after marriage, children, and a higher paying career. Many of us continue to live with the same bare minimum or no life insurance that we had when we first started our careers. But life insurance is an important part of making certain that your loved ones are taken care of – so you should make sure you have enough. If you’re intimidated by life insurance, start with the insurance offered through your employer. You HR department should be able to offer you some counseling (or phone numbers where your questions can be answered) as to what options are available to you. Don’t forget, however, that stay-at-home parents should also be covered by life insurance. Just because they are not bringing in an income does not mean that they don’t need insurance. That means you will also need to see an insurance professional or search for a policy for yourself if you or your spouse doesn’t work outside the home.

In addition to the life insurance offered to my husband through his workplace, we are also setting up insurance for both of us through our financial adviser.

The Bottom Line

Getting these three parts of our estate set up was relatively quick, inexpensive, and painless. I know that we are not done in terms of making sure that our son and our families are protected, but we have the bare minimum in place for our estate. Even if you don’t have much time or money, it’s worth it to have that kind of peace of mind.

Photo credit: iowa_spirit_walker


Published or updated January 6, 2012.
Print or e-mail this article:
Print Friendly

{ 9 comments… read them below or add one }

1 Brad

you really don’t need to pay some lawyer $200 hard-earned bucks to be emailed a boiler-plate pdf will that is obtainable anywhere for free with a little google search……in fact, you can write your own wishes in your own language, sign it front of a notary (for free at your credit union), place it in your own filing cabinet. and you are good to go……

Reply

2 Ryan

Brad, this is probably OK for simple estates, but I would check with a lawyer before doing this for any estate plan which is more complex or in which you want to specify exactly where your estate goes. If you have more complex needs, including anything involving a trust, a business, children who will need to be taken care of, or property held jointly, then it is probably best to at least speak with a lawyer to determine state and other legal requirements.

The last thing I would want is to have my family deal with probate, court costs, and waiting, all because I was afraid to spend a little money. Since I am a small business owner and the father of a young child (with another on the way), I am more than willing to spend a little money to ensure my wishes are followed in a timely and cost effective manner, and that my family and children are taken care of after I am gone.

Reply

3 jack foley

Yea, just shows you how many people are educated in this area..

Makign a will is very important and must be done as you say to protect minors..

Reply

4 Ryan

Jack, this taking care of my daughter is number one in my book. We spent some time with our lawyer going over our will and estate to make sure we would have enough money to care for our children in the event my wife and I were to both die at the same time. We also spoke with our selected guardians to make sure they would be willing to assume the responsibility (on every level, including financially) and made sure we had enough money set aside in our wills to cover the added expense of taking more children into their household. It’s something people don’t want to think about, but it is essential.

Reply

5 Emily Guy Birken

@Brad, while I’m a confirmed do-it-yourselfer in many areas of my life, I was personally more comfortable knowing that my boiler plate will came from someone with legal experience. If it weren’t for my son–that is, if I were writing a will that only had to do with the disbursement of my assets, rather than one that also included what would happen to him in the event of my death–I’d be perfectly happy to do what you suggest. As a nervous first-time mama, I feel good about spending the $200 to know that my son is completely taken care of in case the unthinkable happens. I see it as insurance against my own lack of knowledge in this arena.

Reply

6 Krantcents

Children is one of the most important reasons to have a will. You want to make sure who will take care of them and make sure the estate is distributed to do so too. One can argue whether a lawyer is necessary, but your wishes are important and should be documented.

Reply

7 Ryan

Agreed, krantcents. As I mentioned in the earlier comments, this was something my wife and I spent a lot of time talking about. In the end, we wanted our wishes legally documented so our children would be taken care of. We also made sure our estate would have the funds to do so (via our current assets and our life insurance policies).

Reply

8 MyMoneyDesign

A will is something I need to do and have been putting off for a long time. I was on the fence about using some service like “Legal Zoom” or going completely legitimate with a lawyer. I think I see which way this forum is leaning towards. Thanks for bringing it up and putting it out there for discussion (as well as reminding me to get it done this year!).

Reply

9 Emily Guy Birken

@MyMoneyDesign, just do it! It felt great to know that this particular chore was taken care of and that my son will be provided for. It’s not fun thinking about mortality, but by having a will, I don’t have to. And either way you get your will written, it will be good to have it done.

Reply

Leave a Comment

Previous post:

Next post:

.