Level-up your financial literacy by taking advantage of our free blog! Enjoy topics ranging from money lifestyle tips to fun local activities for the whole family. 

Select a category below:

Estate Plans: Why They're Important & How to Create Yours

By: American Heritage09.24.19
Senior couple laughing together

When it comes to your money, it’s exciting to plan for special goals, like buying a home or saving for your dream vacation. Less exciting? Deciding what happens to your stuff after your death. 

But planning for your personal assets and end-of-life decisions is one of the most important things you can do for your family – and your finances. If you are putting off creating your estate plan, it’s time to stop procrastinating. When you understand estate planning essentials, and have the right professional guidance, the process can be relatively quick and straightforward.



Estate planning is the process of defining what will happen to all your property (your estate) after you pass away. This process also includes other important decisions that will affect you and your loved ones in the future.



No matter who you are, it’s a good idea to have a plan. But many people put off this crucial step, making excuses like these:

  • “I’m too young” Sure, you may not have much of an “estate” when you’re young, but it’s a good idea to create an estate plan early on, just to be on the safe side. Over time, you can update the plan’s documents as needed.
  • “I don’t have an estate” – You don’t need to be a millionaire to have an estate. Even if your net worth consists of little more than your savings and your car, you still want to choose who will receive them if you pass away.
  • “My finances aren’t complicated” – It’s true that a detailed estate plan is especially important for complex situations – which may include business ownership, a divorce, or debts. But any family can benefit from the simplicity and clarity this process provides. 
  • “I’ll do it later” – The best plans are the ones you’ve already made. Create your estate plan now, and you won’t have to worry about it.

Sure, it’s not much fun to consider end-of-life decisions, but doing so helps you define the future of your property – and your legacy. Most importantly, taking this practical step can help you feel more confident about tomorrow while you enjoy your life today.



By taking the time to get your documents in order and work with an experienced attorney, you can:

  • Make sure your loved ones, especially kids, are provided for when you’re not there, and that all your assets go to the people and organizations you would want.   
  • Help prevent disputes and confusion related to your estate and prevent assets from being tied up due to legal obstacles. For example, if the owner of a savings account passes away, their financial institution may only provide access to the account to the executor of the estate (who is authorized through the person’s will, which is part of the estate plan).
  • Potentially protect your estate from outside influences and claims – such as lawsuits and creditors.
  • Find ways to reduce tax liabilities for yourself and those who will inherit your property.



Typically, an estate plan consists of the following documents:

  • Will – Your last will and testament defines who will inherit your money and other items of value (like real estate, vehicles, and that framed painting of your great-great-uncle), as well as charities your estate will support. Your will may also name the person/people who would serve as your children’s legal guardian (if your kids are still minors) and who will be your estate’s executor, the person responsible for carrying out the directions in the will.
  • Power of attorney (POA) – This authorizes someone to act on your behalf in financial and legal matters. If, for medical or other reasons, you can’t do these things on your own, having a POA helps ensure your estate is managed smoothly.   
  • Living will A living will, also called an advance directive, lets you make directions related to your end-of-life medical care.
  • Living trust – Transferring ownership of your estate from yourself to a living trust (a separate legal entity) may offer a layer of protection and potential tax benefits for your assets. It also helps simplify the transfer of property to your beneficiaries by avoiding the lengthy, expensive process of working things out in probate court. 
  • Insurance – Along with life insurance and long-term care insurance, it’s a good idea to have umbrella coverage, which provides additional financial protection for your estate in case of lawsuits or other claims against you.
  • Financial information – These should include all your financial accounts, including IRAs, 401(k)s, and checking and savings accounts.
  • Documents for major assets: Your estate plan should also include the deed to your home and title of your vehicle.
  • Other important documents: Your marriage license, divorce papers, and documents related to business partnerships would also be included.

Have a copy of your estate plan in a secure place where your executor or family knows where to find it, such as a safe deposit box. If you have online accounts, be sure to save your login details as well.



Unless you are well-versed in estate law, working with an experienced will and estate planning attorney is the way to go. He or she will be up to date on both federal and state laws and will know how to dot every i and cross every t to ensure your estate plan holds up in court.

Just as important, your attorney will know what questions to ask and what scenarios to plan for. Consider asking your friends, family, or financial professionals for recommendations of attorneys who specialize in estate planning. 

It’s also a good idea to work with a knowledgeable financial advisor who can provide financial guidance for estate-related concerns. Also, an accountant can help you navigate the complex, ever-changing tax landscape.

It’s true that hiring professionals for this process isn’t cheap, but you’ll enjoy the peace of mind that comes from having a plan backed by professional expertise, which should make managing your estate as simple and stress-free as possible. Your loved ones will be grateful that you put in this extra effort.



At American Heritage, we’re committed to helping you build a secure financial future for your family. Turn to the team at our Investment & Retirement Center (IRC) for solutions and expertise to support a wide range of needs, including legacy planning, life insurance, and wealth management. Connect with your local IRC advisor today to get started



Want to stay up-to-date with more financial articles like this one? Join our email list and receive the latest blog articles in your inbox.