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Protect Your Legacy
With any hope, your money will far outlive you and continue to protect and support those closest to you long after you’re gone.
Andrew Fiebert & Louis Tricarico
December 16, 2024
Why do you want to build so much wealth?
Money can take you and your family to places where you can create lifelong memories. With any hope, your money will far outlive you and continue to protect and support those closest to you long after you’re gone. That’s a real legacy.
It’s important to maximize your money while you are here, and if you plan your estate well, that money will stay with your family and continue to be used in the ways you intended.
Estate of Mind
Image Credit: Unsplash
When should you start estate planning?
It doesn’t have to be an “estate” of emergency to start planning what happens with your money after you’re gone. Those in the know say it is best to start this process when you’re 18.
That feels a bit early, considering most only have a PlayStation and a bank account with graduation money. Still, when you turn 18, no one (not even your parents) can make decisions on your behalf without the proper legal documentation.
If not immediately after you turn 18, you should begin this process after you acquire large assets like a house, investments or substantial savings and then continue to update periodically, some say about every three years should be sufficient.
Why does early estate planning matter?
My father came home sick from work one day, and within a week, he passed away. At that moment, I learned that there are no warnings before the worst can happen and almost no time to get your affairs in order once something tragic has already happened
My father wasn’t the healthiest man before his passing, so he had planned, thankfully, but some aren’t so lucky. Your loved ones will be so consumed by grief and confusion after your passing that you don’t want them to have to deal with legal complications or potential in-fighting once you are gone.
In addition to minimizing potential family disputes, proper estate planning minimizes taxes and probate costs, making sure more of your money goes to helping out your family after you are no longer here to do so yourself.
Trust Fall
Image Credit: Unsplash
Estate Planning has some pitfalls to avoid, and the potential consequences can be extensive and make an already stressful and sad process even more of a nightmare. Having a good plan, doing it early, and updating it are key to avoiding the worst.
An improper estate setup can cause your assets to get stuck in probate, which can take anywhere from 6 months to 2 years.
A $500,000 estate could lose $25,000–$50,000 in probate fees and delays.
Annually, state governments report holding over $49 billion in unclaimed assets, including bank accounts, insurance proceeds, and unclaimed estates
The federal government collects $10–15 billion annually in estate taxes, much of which is from inadequate tax planning. Even small/medium estates could lose tens of thousands of dollars due to taxes on overlooked income or capital gains.
It doesn’t have to be this way if you start planning now. Technology has made the process cheaper and a whole lot easier to complete. The rest of this Newsletter is dedicated to sharing the DIY approach and the easy-mode way to get all of your estate ducks in a row.
“The estate isn’t the only place to mess things up, but it is an easy one.”
-Warren Buffet
Where There’s A Will, There’s A Way
Image Credit: Unsplash
So, you ate some bad sushi, and the threat of death has become a scary reality. You’re now forced to start planning your estate. You’ve got some serious work ahead; the sooner you start, the better.
CHEAT CODE: Skip to the next section for the easy way to plan your estate digitally so you don’t have to deal with this process yourself. It’s not free, but neither is time wasted on things that don’t bring you joy.
It’s A Lot of Work
Should you plan your estate on your own, it will take multiple steps and require working with different professionals, including your tax team and estate attorneys.
Steps to start planning your estate:
Determine your objectives, like asset distribution, tax minimization, guardianship for minors, and healthcare preferences.
List and consolidate all of your assets
Identify beneficiaries for key accounts and policies
Establish executors to manage your estate, power of attorney for financial or health-related decisions, and designate a trustee to oversee your trust.
Draft estate planning documents (online templates available for around $50/doc), including:
Will - asset distribution/guardianship
Trust - complex plans and tax advantages
Power Of Attorney: for health and financial decisions
It’s Expensive
After you prep everything, you need to share your work with your estate team to ensure everything is filed properly. This can get expensive, especially if you have a lot of assets or beneficiaries for which you are hoping to make plans.
If you hire a lawyer to guide you through the entire process, the costs will land somewhere between $1,000 and $5,000.
Doing it on your own (“raw dogging” your estate plan) can range from $300 - $1,000. Although it can be more cost-effective, you risk making a mistake that could cost your estate quite a bit. It also has one massive downside…
It Takes SO MUCH TIME
My little (31-year-old) brother is autistic and lives in a group home, and my mother wanted to set up my sister and me as co-guardians for him. I consider both of us fairly responsible adults who don’t waste time or procrastinate. It took us SIX MONTHS to watch 5 minutes’ worth of videos and sign three pages.
If you set out to plan your estate, this process will be extended each time you have to set up executors, beneficiaries, and trustees, and, much like my Mom, you’ll be responsible for constantly reminding everyone to do their work.
We estimate that a simple plan can take anywhere from 4 to 8 weeks, and for more complex plans with more assets, it could take closer to 6 months. You would also be responsible for continuing to push the process forward. Lawyers bill by the hour, but they do not complete the work.
Besides possible mistakes you could make, the amount of time the process will take, from appointments to nagging your family and friends and fighting through gangs of murderous lawyers, will be extensive, to say the least.
If this doesn’t sound appealing, we have an easier option below.
Estate plan on easy mode
When our twins were born, the full gravity of bringing people into this world hit us. What if after they were born, something happened to us? Who would take care of them? We realized we needed a Will.
After some research, I realized the process of getting it done was intense. I didn’t love what felt like a mountain of busy work — paperwork for days.
So, like my lawn care, I outsourced it.
In September 2019, I paid $499 for the Trust & Will combo package for both a Trust and a Will (just a Will costs $199).
We got their packet in the mail with clear instructions on what to do with each document. One night, we grabbed a bottle of wine, discussed it all, and filled it out. The hard work was done. Paperwork accomplished!
We got it notarized at UPS the next day, and then we were done. We digitized the documents, and that was that.
Let’s talk about it.
If you want to learn more, our Estate Planning podcast episode is for you!
We talked to the head Legal Counsel for Trust & Will, and they answered every question we could come up with.
Money Talks
What is your most prized possession that you would want to make sure is given to the right person after you are gone?
Let us know so we can share your responses in a future newsletter!
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May the cash flow always be in your favor,