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How Fit is Your Financial Future? Get Fit with an Estate Plan

Being a member of MIT Federal Credit Union means you care about your financial future and financial well-being. General financial planning, strategic investing, asset diversification and management, and retirement planning are all parts of your financial repertoire. You’ve got it all under control. 

But what if something happens, and you’re either temporarily or permanently unable to manage your finances? An estate plan is the only way to ensure you stay in control of everything you’ve worked so hard for. 

Why is an estate plan necessary?

It’s entirely understandable if even the mention of estate planning makes you feel a little bit depressed or causes you to panic about the “what ifs.” Nobody gets excited about considering the scenarios where an estate plan could come into play, but that’s exactly why it’s so important to take charge. After all, an estate plan does much more than ease the burden on loved ones after you die; it can literally save your life (more on that later)! Your estate plan also ensures your finances are handled in the event you’re unable to manage them, ensures your children and pets are cared for, and has the potential to substantially impact the taxes and legal fees associated with settling your estate after you pass away.

So, not only does creating your documents demystify and destigmatize the process and circumstances, it will inevitably leave you feeling empowered and prepared. These are all good things!

What exactly is included in an estate plan? 

An estate plan is a set of legally-binding documents that ensure your wishes and wellbeing are protected in the event you are unable to speak for yourself. Estate plans vary based on individual need and circumstance, however, there are three standard documents that are universally applicable:

• Will: Sometimes called a Last Will and Testament, a Will expresses your choices for what should happen after your death. Its primary purposes include disseminating your directions for what should happen to your assets, and appointing guardian(s) for children or adult dependents. Wills are applicable for anyone 18 years of age or older.
• Power of Attorney (POA): A Power of Attorney is the document that ensures your financial security, and unlike a Will, takes effect during your lifetime. POAs are used to appoint a financial surrogate to act on your behalf should you become either incapacitated or for some other reason unable to manage your finances. POAs can be designated as temporary or indefinite (durable).
• Health Care Proxy (HCP): No document has the potential to play a bigger role in our lives than a Health Care Proxy. While your POA has your finances covered, your HCP has you covered – literally. In the expected or unexpected event that you are unable to speak for yourself, your HCP ensures you receive the medical care (including any life saving procedures) you choose, and the person you choose will serve as your voice. HCPs are essential for anyone 18 years of age or older.

Am I covered under my spouse’s/family’s estate plan?  

Estate plans cover individuals – not spouses, not partners, not families. 

While it is common for couples to make joint decisions in many asset-related estate manners, partners often have differing priorities for how and to whom their assets are distributed. To ensure each individual’s wishes are honored – even if the wishes are the same – each individual requires their own documents. Similarly, the financial and medical decisions and directives held in POA and HCP documents only apply to the named individual.

There are also many assets that are often legally held by an individual and cannot be transferred or even accessed without permission from that person. In the event they die or become medically incapacitated without a legal directive, a spouse will be required to obtain legal authority to assert control over these assets. This could include accounts that are used to pay a mortgage, tuition, medical care, or other significant financial obligations.

A document such as a Joint Trust may include directions for the disbursement of finances or assets that are jointly held by more than one person. However, that direction requires individual supporting documentation (in this case, a Pour-Over Will), which should reference the jointly held document. 

How do I know if my financial situation warrants an estate plan? 

Simply put: there is no level of personal wealth that precedes or eliminates the need for the financial protections that an estate plan offers. If you’re a legal adult, 18 years of age or older and identify with any of the following, an estate plan is applicable and essential to your situation: 

• Single
• Married
• Domestic Partnership
• Male
• Female
• Non-Binary
• Employed
• Unemployed
• Retired

The decision to forego an estate plan can lead to unnecessary family chaos as well as a multitude of complex, time-consuming and substantial financial consequences. Dying without an estate plan in place, referred to as dying intestate, can cost up to 8% of the total value of the estate, and leaves family and friends in a state of flux and potential conflict as they petition probate courts for control over your assets and dependents. Your voice and any wishes or hopes you had for the legacy you leave behind will never be heard, and the fate of everything you’ve worked for will be determined by a court. 

All of these nightmare scenarios can be avoided with a basic estate plan. 

Exclusive MIT FCU Member Offer

MIT FCU knows the value and importance of an estate plan, which is why we’ve partnered with Gentreo to ensure all of our members have access to affordable estate planning. 

Click here to start protecting yourself with Gentreo’s modern estate planning solution today. Use code MITFCU15 to receive 15% off your first year of membership ($100 value). 

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