072: Why is estate planning important

Why is estate planning important

Transcript

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What is estate planning and why is it important? Estate planning is your game plan for what happens to you, during your lifetime. You've heard me say this in a gazillion other videos that you are the CEO of your own life. And as the CEO, you have control over everything right? You have control over what happens to you physically and mentally. You have control over your finances. You have a job, you save money, you invest that money, you buy a car, you buy a house. You are the CEO of your life. So what an estate plan does and why it is so important is because it provides a game plan if you have to step down either temporarily or permanently as the CEO of your life. And what I mean by that is estate planning is not only about what happens after you pass away, but what I think is more important. What happens to you, during your lifetime. That's the key to proper estate planning, guys. You have to have a plan in place that says exactly what happens if you become incapacitated. And again, it could be temporarily or it could be permanently. But if you were to become incapacitated, who do you want to take over as the CEO and what do you want to happen? And what I mean by that is we name somebody as your financial power attorney, as your successor trustee for your revocable living trust and as your health care power of attorney for your health, for your mind, your body and your soul. We need to have all three of these people in place so that if you do become incapacitated or sick, that they know what to do and how to take care of you the way you want to be taken care of, not how they think you should be taken care of or how your children think you should be taken care of, but how you want and should be taken care of because those are your wishes, not anybody else's. And that's so that's why it is so important to have a game plan in place. The next thing, obviously, is after you pass away, you also need a game plan. You need to have a game plan in place that says exactly what you want to happen to your assets and who you want them to go to. If you have no game plan whatsoever in place, then most states, most jurisdictions have what are called laws of intestate succession. Kind of a scary word means basically that the state that you live in your jurisdiction is going to decide exactly how your assets are going to be distributed. I can tell you from personal experience, from probating hundreds of estates that probably 80 to 90% of the time families do not like the way the laws distribute their loved one's assets. And it can get really sticky if there are stepchildren or there's children from each spouse had children from previous relationships or marriages. There's a whole lot of things that can go wrong but if you read those laws of intestate succession, your property may get distributed or divided up between people who you never intended to have part of your estate so that is why it's so important to have an estate plan in place for what happens during your lifetime. Extremely important. And what happens after you pass away.