Most of us know how important it is to have a will, but an estate plan goes beyond deciding how to distribute your assets. 

According to a recent survey, COVID-19 motivated more people to see a need for an estate plan, and younger adults are now more likely to have a will than older adults. Yet only 33% of Americans say they have a will or other type of estate planning document in place.¹

Many people put off estate planning either due to lack of motivation or the assumption that they have enough assets to leave to anyone.¹ However, a good estate plan covers who would make decisions for you regarding your finances and your health, no matter your age or level of wealth. And when it comes to getting started, there’s no time like the present.

Here’s a look at four reasons estate planning is important.

1.  An estate plan accounts for your assets, health and final wishes

Many people think an estate plan deals exclusively with financial assets. But that’s only a part of it. The most basic documents should include:

• Property power of attorney. Also known as financial power of attorney, this person will handle your property and financial matters if you're unable to do so yourself. For example, should a health emergency or accident happen, this person could pay your bills or manage other financial considerations on your behalf.
• Healthcare power of attorney. Someone you designate to make healthcare decisions for you if you're unable to. If you’re moving away from family for the first time, it’s important that you designate someone to make healthcare decisions should something happen — preferably someone local.
• A will. Wills document how you want your assets distributed after you die. A will can also include information like who you’d want to care for your children. Assets passed according to the terms of a will are supervised by the probate process, a court supervised process that is public record.
• Advance directive or living will. Advance directives provide instruction regarding your end of life care if you’re unable to communicate them. They include directions like whether you want to have life-sustaining measures taken and other end of life care decisions.
• A trust. When it comes to your financial assets, a trust can offer potential benefits not available with a will. A trust keeps your financial information out of the probate process and allows for the care of your assets during any time of disability prior to your death. A revocable trust allows you to benefit from your assets during your lifetime and is often paired with a pour-over will, which assures that any assets not held in the trust are added to the trust after your death.

2.  An estate plan is comprehensive

An estate plan accounts for all your assets, which may include real estate, investments, cash and savings, and other physical and intangible assets.

Some of the items you’ll need to have when you start the estate planning process include:

• Total value of assets
  • Home and other properties
  • Vehicles
  • Life insurance
  • Stocks, bonds and other securities
  • Retirement funds
  • Jewelry
  • Artwork
• Total liabilities
  • Student loans
  • Credit card debt
  • Mortgages and home equity loans
  • Auto loans
• Insurance policies
• Passwords for all online financial accounts and other digital assets
• Beneficiary information including who will care for dependents if you’re unable to
• Trustee information

3. An estate plan identifies key players

Part of estate planning includes appointing people to play key roles for “in the event of” scenarios. Consider and discuss the following roles with your attorney.

• Healthcare and property powers of attorney. Ask yourself, “Who do I want making medical decisions and handling my financial affairs for me if I can’t?” This could be your spouse or someone else who understands your wishes and you can trust to follow them.
• Guardian of your children (if you have any). Be sure to talk about this with your spouse or partner.
• Trustee or executor. Being a trustee can be time-consuming. You may want to consider not only who you trust, but also who has bandwidth. A corporate trustee acting along with a trusted individual trustee(s) often provides a great balance of responsibilities. Trustee responsibilities include: 
  • Investing funds properly and in the best interests of all beneficiaries.
  • Filing tax returns on a timely basis.
  • Informing beneficiaries of anything that’s happened in the trust, including any investments and distributions that have been made.

4. An estate plan puts you in control

Not accounting for what happens to your assets can open you and your loved ones up to risk. If you were to face an untimely death, the statutes of the state where you reside will dictate the terms of your default plan. The courts will appoint an administrator to settle your estate, which can be an expensive process, and one that you wouldn’t have control over.

Estate planning includes many legal and financial documents. A financial professional can make the process feel more manageable by helping you account for your assets, your finances, and your life situation to. Plus, a financial professional may make your trustee’s life easier by handling many administrative burdens that can sometimes be overwhelming.

Regardless of your finances or age, talking with a professional about your estate plan can help ensure your loved ones are cared for if anything were to happen to you.

Review important life milestones that could impact your estate planning and learn what to account for during each.