I just got back from a memorial service for a good friend of mine that I had known since high school. Unfortunately he left behind an estate planning nightmare. I gave my friend many financial planning tips over the years and he did everything I suggested so he could to make sure his business, and finances would be in order in case something happened to him.

So- what went wrong if he did everything right?

Our culture supports us working with family and friends and those that we trust when we are put in positions of having to make important decisions about things that we don’t know anything about.  We have our cousin help us buy a car (since he works at the dealership) or the aunt that does our taxes (since she works at an accounting firm) or our brother-in-law that will refinance our home at a good rate (since he is a mortgage broker).

In this case, a family friend who is a retired attorney had set up the estate plan.  There was just a will and nothing else. Now the estate has to go through probate and the heirs are watching their inheritance go down the drain since they are helpless to keep his business running until it could be sold. No one has the power to pay the bills on his home and no one can pay his employees. Everything freezes until the estate settles.

Can you imagine the shock and grief that his adult children are going through? Not just mourning a death but watching a man’s legacy go down in value right before their eyes and there is nothing they can do.

Now the attorney is a good man and has had a good legal career; but if you look at his credentials, he did very few estate plans and was mainly a personal injury attorney. He gave my friend a “good deal” on the estate plan just like many of your family friends will give you a “good deal” but sometimes it is better to pay full price with a stranger who has the expertise that you need. It will cost you a lot less in the long run.

Treat your well meaning family and friends like you would when you are scrutinizing other professionals. Check out their background and credentials to see if they really have the expertise to help you with your particular problem.  It is a complex world out there and everyone cannot know everything so you really need someone with a particular skill set that suits your needs.

I remember when I needed a skin graft and I asked my orthopedic surgeon who saved my life and with whom I trusted, to do the surgery. He replied, “Well, Fern, I can do it, but I haven’t  done one since med school. I think you would be better off with a surgeon that does a lot of these types of surgeries.” Enough said. I got it, and you should too.

Get your estate plan done right by an estate planning attorney who specializes in estate and elder law.

The post A Sad Tale of Good Estate Planning Advice Gone Wrong first appeared on Whole Hearted Way.

The third step in your do it yourself financial plan is estate planning. Estate planning is thought about as wills, trusts, and gifts, etc. Not anymore. No one wants to think of sickness, old age, and death, yet all of us will experience that at some point, and the most important element of a person’s legacy is not money but passing along values and life lessons. Yes, the basic documents of an estate plan which are needed to build wealth are a will, durable power of attorney for financial care and durable power of attorney for health care. But now people want so much more. They want to know how the final wishes and preserved memories of the individual will be left behind. Here is the new softer side of estate planning:

Ethical Wills-more people are using this type of will not just to distribute assets but to also put their values and beliefs on paper. Even if you are not the best writer, you can find outlines and examples on the web to get you started on what memories, beliefs, values, or life lessons you would like to leave behind.

Durable Power of Attorney for Financial Care is a document that gives someone the authority to take over your financial matters upon your disability or incapacity. Make sure that the individual you choose is aware of his or her duties. I have found too often that one child who is not financially savvy is given the responsibility that he or she did not want. Don’t surprise people with this responsibility. Talk to them first to see if they are open to being appointed for these duties.

Durable Power of Attorney for Health Care is a document that gives someone the authority to make medical decisions for you upon your disability or incapacity. 85% of most DNRs (do not resuscitate) are not honored. Again, make sure the individual you choose knows of his/her obligation to see that your wishes are honored.

Some of the new advanced medical directives like the Five Wishes available at Aging with Dignity offer a more detailed medical directive which is easy to understand and use.

Passing along “values and life lessons” was overwhelmingly considered (by over 75 percent) the most important element of a person’s legacy according to a recent study. Don’t wait to execute these documents under duress. Plan your legacy today for the protection of your assets and your family.

The post Legacy Planning – The Basic Documents of Estate Planning and Beyond first appeared on Whole Hearted Way.

Don’t even get me started on what will happen to your investments without an estate plan.  Kiss that investment plan goodbye.

At the very least, you and your spouse should have written wills. If you can’t afford an attorney, look through my resources for do-it-yourself options. Beware though that each state has unique twists so make sure your will is federal and state compliant.

Estate planning isn’t for the dying. It is for the living. It is part of a firm financial foundation that is a necessity before you start to invest. Secure your foundation with steps #1-3.

The post Do-It-Yourself Financial Plan Step #3 Estate Planning first appeared on Whole Hearted Way.