Why you should consider estate planning

by The Washington Informer

The Financial Journey is a unique series focused on financial educa­tion and opportunities. These stories have been created through a strate­gic partnership between Wells Fargo and Word In Black.

Billions of people strive daily to create a stable life for themselves and their families. Unfortunately, we cannot predict when a life-al­tering change will occur. Because of this, preparation for the unexpected is essential.

Nelrae Pasha Ali, a Senior Finan­cial Advisor and Managing Direc­tor/Investments with Wells Fargo Advisors with more than 20 years of expertise and a focus on customized planning, says that making estate plans can help people prepare for these changes if they become inca­pacitated or pass away unexpected­ly.

Despite what some may believe, estate planning is not solely for the wealthy; in fact, estate planning is how people can ensure that all of their assets go to the correct indi­viduals and that their wishes are respected.

“Not taking the time to make the right preparations can have severe effects on your loved ones. In fact, I consider estate planning as a love letter to the family,” Nelrae said. “If you want control after your passing, estate planning is the best place to start.”

A will, durable power of attorney, a healthcare power of attorney, a living will, and a revocable living trust are the five key documents for estate planning. Other forms may be necessary depending on your unique circumstances.

A will provides instructions for distributing assets to beneficiaries after death. In it, a personal repre­sentative (executor) is assigned to pay final expenses and taxes and distribute remaining assets.

A durable power of attorney for financial matters allows a trusted individual management power over individuals’ assets either now or at a later date, if they become incapac­itated. This document is effective only while still alive.

A healthcare power of attorney al­lows someone to make medical de­cisions on behalf of another person if incapacitated and unable to make these decisions for himself/herself.

A living will express intentions regarding the use of life-sustaining measures for those who are termi­nally ill. It ensures that no one else has the authority to decide what happens if these individuals become incapacitated.

By transferring assets to a revo­cable living trust, individuals can provide continued management of their financial affairs during their lifetimes, after death, and even for generations to come.

Everybody has a unique scenario when it comes to estate planning. “I start this discussion with clients by asking what is most important to them,” Nelrae said. “It’s important to have this discussion while there isn’t a crisis in progress.”

Additionally, the person who some­one wants to have manage their fi­nances may not be the same person they want to have make decisions regarding their health in a crisis situation, so it is critical to have a plan in place. Again, if someone is incapacitated and their wishes are not recorded, their spouse may have one idea of what their wishes were while their adult children and/or parents may have another idea. This confusion could lead to hav­oc and leave families in financial or legal turmoil. Making decisions during this time can be very diffi­cult, but having a written record of wishes will help loved ones navigate the family’s new normal,

Finding a qualified estate attorney is the first step in estate planning, according to Nelrae. The bottom line is that if you don’t make the deci­sions, someone else will.

(Wells Fargo Bank, N.A. is a member of the Federal Deposit Insurance Corpora­tion.)

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