Most people kick the can down the road on estate planning for as long as possible, and justifiably so. It’s not easy to talk about what to do in the event of serious illness or death. It also takes time and money to work with an estate planning attorney to get the proper documentation in place. Estate planning is a chore. And you won’t even be around to see the fruits of your labor! So why go through the trouble?

We wrote about estate planning for LGBTQ+ couples in the past, but I wanted to revisit this critical pillar of a well-built financial plan (and life) and explain why estate planning is so important, not just for LGBTQ+ households, but for everyone, no matter how many assets you have. 

First, What is an Estate Plan?

The most basic documents of an estate plan, which require the assistance of a legal professional, are the following: 

• Last Will & Testament: Gives instructions about what will happen to your assets upon death and any further instructions you want to leave behind upon your passing.
• Power of Attorney: Ensures that the person(s) of your choosing can act on your behalf in financial and legal matters should you become incapacitated. 
• Living Will: Gives instructions for the type of care you’d like to receive if you become terminally ill or permanently mentally incapacitated. 
• Health Care Proxy: Appoints someone to make healthcare decisions on your behalf, similar to a power of attorney but limited to healthcare. 

Beneficiaries are also a vital part of your estate plan and need to be listed on your various financial accounts (e.g. retirement accounts, brokerage accounts, even your bank accounts).

You may also include in your estate plan:

• The contact info of professional relationships (lawyer, accountant, financial planner, etc.)
• Copies of important documents (birth certificate, social security, marriage/divorce certificate(s), etc.)
• An ethical will, which is a document used to communicate things like values and life experiences to your loved ones. 
• A comprehensive list of logins for your various subscriptions, your phone, email and other online accounts.

Your Estate Plan Protects Your Loved Ones

While he wasn’t talking about estate planning at the time, Kenyan philosopher and theologian John S. Mbiti captures the essence of why this is all so important when he wrote: “The individual can only say, ‘I am, because we are; and since we are therefore I am.’” 

No matter what, your incapacitation or death will have an impact on a number of people. This is why probate law exists. As soon as something catastrophic happens, laws are in place so that communities come together to responsibly administer an estate, because it takes work to figure out how to pick up where that person’s responsibilities dropped off and what to do with their property and assets. 

If an estate plan isn’t in place, state laws have antiquated default language that looks to “next-of-kin” (parents, siblings, children) as beneficiaries and administrators of an estate. For those in the LGBTQ+ community who may have strained family ties or non-traditional relationship structures, naming beneficiaries is a crucial consideration. People you consider to be your next-of-kin may not always line up with the state’s definitions. 

By getting an estate plan in place, you are protecting the security and the integrity of the people in your life who are most important to you and rely on your care. Setting up guardianship for dependents, allocating resources to pay for debts (so that they don’t fall on the shoulders of your successors), and leaving other instructions to care for your loved ones are all invaluable gifts that make up the estate plan.

Your Estate Plan Is Part of Your Legacy

What is the mark that you want to leave behind on your community and on this world? An estate plan is a way to make sure that everything you’ve worked for isn’t sent into disarray after your death. Again, your incapacitation or death is going to make an impact on the people around you, regardless of whether you decide to make an estate plan or not. In fact,  no estate plan is still an estate plan! Leaving your loved ones without any direction, or worse, without any financial or legal protection, can lead to countless hours of stressful work to untangle and uncover crucial information. It can also ignite potential battles with state entities or family members over how to resolve unanswered questions. 

Of course, we can’t predict when and how something catastrophic will happen. This means an estate plan is never going to be airtight. The best you can do is be mindful that something could happen.  Start to put the big parts of your estate in order, e.g. adding beneficiaries to your retirement account(s) and savings account(s), setting up instructions for how to deal with any property, and/or how to take care of any dependents or other major responsibilities.

We devised a thorough–but not exhaustive–checklist to help you keep things organized that you can view and download here. Revisit it every so often, especially after there are major life changes, to make sure your estate plan is honoring your ideal legacy.