What Documents Do I Need For Estate Planning? | Ep 212

[00:00:00] Intro/Outro: You know what it is? That’s right. It’s time to talk money with your money nerd and financial coach. Now tighten those purse strings and open those ears. It’s the Money Talk with Tiff podcast.

[00:00:15] Tiffany Grant: Hey, hey, this is another episode of Tiffany’s Take where I answer your money questions. If you want your question answered on the show, just go to www dot.

With t.com/x, Tiffany, so let’s hop right into it. This question is, Tiffany, what type of estate planning documents do I really need? Okay, so fortunately this has become a hot button topic, especially with the onset of people on TikTok and other social media platforms talking about trust, which we’ll get to later, but I’m glad that it’s on people’s mind because you never know when it’s.

Time, you know, you’ll be here on this earth and you wanna make sure that you have your information and everything you need all in order. So I’m gonna go over just a few things to think about when you are trying to do your estate planning. Now this is not legal advice. Um, this is for informational purposes only.

So if you do want to get these documents drafted by a lawyer, please make sure that you consult with them and take what I say just for information. All right? So first, and for. You want a last willing testament? Most people know what a will is, but if you don’t, a will is something that, it’s a document that tells people what you want pretty much.

So it tells people, oh, this is, um, who I want to leave, uh, my China to, and , you know, stuff like that. So it’s something that tells people after you die, it’s something that. To people what you want and what you desire. So I highly recommend that you have a last will and testament. Um, I actually, uh, tell people to get a living will.

So what does that mean? A living will means that you can change it at any time, right? So there’s a living will and there’s a non-living will, and you wanna make sure that you’re doing a living will, so that way you can change it. Um, and it’s. . Um, so definitely check that out. Number two, you need a durable power of attorney.

So a durable power of attorney is, um, put in place so that way if anything happens to you and you’re incapacitated, so you don’t die, but you’re incapacitated for any reason, someone can step in and take over your financial. Stuff for you pretty much be you , right? So it’s very important that you pick someone that is trustworthy, that, um, will always act in your best interest because you’re giving them a lot of power, um, over your life when you have a durable power of attorney.

So some cases where this may be relevant, let’s say you get into an accident and now you’re unable. Let’s say you. Coma or something. Now the durable power of attorney can step in and still pay your bills, you know, so I also recommend. Whoever you name is your durable power of attorney. You give them access to your login information where they can find that information if they need it.

Maybe you have all your documents in one place, which I highly recommend. Um, . Maybe you let them know where that is and it has. You know, your passwords and stuff so that way they can take over and, you know, pay your bills. Um, do whatever they need for you while you’re incapacitated. So that’s number two.

Number three is an advanced medical directive or also known as a healthcare power of attorney. Now this one’s different than a durable power of attorney cuz usually durable power of attorneys cover like your financial stuff you. Taking care of your business. A health, healthcare power of attorney takes care of your health if you are unable to do so.

So an advanced medical directive that’s telling people. Look, if something happens to me and, um, you know, I’m on the brink of, you know, dying. You can tell people, well, I don’t want you to try to keep me alive with ventilators and stuff. I just want you to let me go so you can tell them. That’s why it’s called an advanced medical directive, because you’re telling them.

what you want medically in advance of something happen happening. Um, then we have the healthcare power of attorney, which is similar. Healthcare power of attorney is who you want to make these life potentially life changing decisions for you. So you can name someone to say like, okay, if I am under those circumstances, who is going to act in?

Um, interest of me when communicating to the doctors and things like that, who is going to, you know, pretty much have life or death decision making over you if you are incapacitated to do so. So you definitely want a healthcare power of attorney set up because you don’t wanna be in a situation where you don’t have anybody named and then the doctors can’t talk to anybody because you didn’t do this ahead of time.

So definitely do that. Also, you wanna. Well, this one depends. Okay, so everybody’s heard of trust probably by this point because TikTok has been going rampant, you know, reels, shorts, whatever. Talking about trust. Now, I will say trusts are not for everyone, cuz trusts are expensive to set up. Usually if you do it the right way with a lawyer.

And a lot of times you might not need it with some of the other stuff that I’ll be talking about in this episode. And so you wanna make sure if you’re considering a trust, you know exactly what you’re getting into, what you need to do, what it’s used for. Uh, trusts are pretty much used to put property and things in and you can direct how.

um, the stuff gets used. So lemme give you an example cuz I know that just sounded really complicated, . Um, so to give you an example, let’s say I want to have a trust for my kids, right? So as they grow old or grow older, I don’t want them to have all of the money that I’m leaving them all at the same time.

And so I might put everything into a trust so that way I can say, okay, I want you to have. 20% of this at age 20, I want you to have the other, let’s say 50% of it at age 35, and then you can have the rest at 40. You can control how your money gets doled out after you pass away using a trust. Trusts are also good for, um, If you have children that are, or if you have anybody that you care for that is, um, disabled, you can use trust to kind of, um, tell the person that’s gonna be taken care of them how you want your money doled out.

Uh, there’s also something else for, uh, I can’t remember off the top of my head. what it’s called, so please forgive me. I’ll probably do another episode on that. But it’s something else that you can put in place when you have a child or someone that you care for that is disabled, um, and you wanna name somebody to take care of them afterwards.

There’s a certain document you can put in place. So I’ll do another episode for that. But let me just stay on topic for this. That’s one reason why you would wanna use a trust. Um, if you want your. Assets not in your name. You want it in a trust name. Just so you know, for the purposes mentioned, uh, previously, it’s not really you.

It’s the trust that owns this stuff. Um, that’s another reason why you would do that. So always educate yourself on really any of these things. But definitely if you see something that’s trending on TikTok or , you know, on these short videos or whatever, educate yourself first before you jump in, uh, headfirst.

All right, so next. You wanna make sure that if you do have a retirement plan in place, so I’m talking about 401ks. IRAs 4 0 3 Bs, uh, simple. I, whatever the flavor of retirement planning you’re doing, you wanna make sure you have beneficiary set up. Why? Because the beneficiaries tells whoever you have your funds with, this is who gets the money after I pass away.

Now, depending on the type of retirement plan it is, it still might get treated a little differently. Like for instance, if it’s a traditional i r A, then um, The person has, is gonna be responsible for taking the required minimum distributions on that money when they get old enough, right? So it kind of rolls into theirs, but in a separate account, if that makes sense.

So you wanna make sure that you have your retirement plan beneficiary set up. Super important, super easy to do. Usually you. Go to the website, um, if you have online access and change your beneficiaries there, or it’s usually just a simple form that you fill out. Now when we’re talking about beneficiaries, cuz I’m, I’m also gonna give you some more things to think about when naming beneficiaries.

but you wanna make sure that you’re not naming kids. That’s one mistake that I see people do. They’ll name people that’s under 18. Well, guess what? It doesn’t do any good because they’re under 18. You wanna make sure that you are naming people that are over 18 so they’re able to take over that money for you.

Because if you name someone that’s under 18, you’re gonna leave it up to the courts to figure out and you don’t want that. So that’s the purpose of all of this. To have in place is to keep it out of probate as much as possible. Probate is when it goes to court, so be they so they can figure it out for you.

All right, so retirement plan beneficiaries. Next, you wanna think about your life insurance beneficiaries. Now you might be saying, well, duh, Tiffany, when I get a life insurance policy, I put my beneficiaries on there. Yeah, that’s all finding good, but a lot of times people forget. Who they put as their beneficiary.

And sometimes situations change. Let’s say for instance, you put your spouse on there as your beneficiary, but now y’all are divorced. You don’t want it to be like 20, 30 years later you pass away and your spouse is still eligible to get that life insurance money, . You know? So, um, definitely make a habit.

even if you have named someone as a beneficiary, just to go back and check on these things periodically, you know, maybe like once a year and make sure that they are still the same. Um, another. type of situation. Where this could be pertinent is, for instance, my grandma passed away in September. She was my beneficiary for everything, my first beneficiary, cuz I knew that she would be the one that would take care of my kids if I was to pass away.

And so I had to go through the process of changing all my beneficiary designations because yes, you can name a primary and a secondary. If your primary passes away, then of course it defaults to your secondary. But what if your secondary passes away? So I just prefer to change everything around and just make sure that I’m covered because you never know when it’s your time or when it’s their time.

And so you wanna make sure that is all, um, under control. So another thing to think about is TODs or transfer on death. Now, these are important for bank accounts that you may have. So if you have a checking account, savings account, you know, things like that, you wanna make sure you have a transfer on death or some other type of transfer document in place, so that way if you pass away, it can automatically go to whoever you name instead of.

and this really happened, y’all, instead of you passing away and then your family lets the bank know and they lock up your accounts until it goes through probate. I’ve seen it happen. I’ve heard of it happening, so you wanna make sure that you have whatever documents you need with your bank. To make sure that when you pass away the money automatically goes to someone else.

Um, so that way it can stay outta probate. And then also if you want to be proactive, you can, um, put your funeral plans together and your funeral arrangements. Like how do you want things to go? Maybe you wanna leave a last word or something, you know, for your family. That’s something that you should think about in doing estate planning as well.

So for instance, to give you an example, and you know, I am very comfortable talking about death and dying because everybody’s gonna have to go through it. So I don’t mind talking about this type of stuff. And one thing that I used to always say was, I wanted to be crem. . So that’s definitely going into my funeral plan and arrangements and my will and everything else.

so people will not be confused and you hear and get here first. Um, I do want to be cremated and I was also going to, um, Write up a funeral plan where they take my ashes to, you know, some type of body of water, preferably an ocean, sprinkle a little bit in so that way I can just, um, and, and then I also, was like, Ooh, I want them to play sitting on the dock of the bay, the Sarah Burrells version, because I just feel like that would.

Perfect for that time, but I was like, Ooh, that’ll probably be really sad for the people that I’m leaving behind . So I might change that part, but you can stipulate kind of, you know, within reason, you know, you can’t ask your family to do stuff that you haven’t set up the financial ability for them to do.

So, um, , so keep that in mind as well. But you can also just put something in there about how you want your arrangements and stuff to go. Uh, so that’s completely optional, completely up to you. The rest of this stuff is super important. Trust are optional as well, but everything else you need to make sure that you have in place.

Um, when it comes to your. Situation, your estate planning situation. Now, if you have any questions on any of these, of course, like I said, educate yourself, but reach out to an estate planning attorney. This is what they do all day, every day. Uh, they can definitely help you out. Check with your local credit unions or banks.

Sometimes they have services where you can get, um, estate planning documents for cheaper. Than going straight to a lawyer. I know for instance in North Carolina, if you’re a member of the State employee’s Credit Union, they have a service where you can get your estate planning documents for a couple hundred dollars.

It’s not that bad. So if that’s something where you need help with doing this stuff, highly recommend getting an attorney. You can DIY a lot of these. Um, actually all of them if you want it. But mind you, if you DIY and it’s not set up correctly, you’re back to square one . So even if you diy, I still recommend getting a lawyer to look over it just to make sure it’s good and then moving forward from there.

So hopefully this episode helped and answered your question on what type of estate planning documents you may need. Like I said, if you have questions or want to ask your question for the podcast, you can go to www.moneytalkwitht.com/x Tiffany, so I look forward to speaking with you all next week. , bye.

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