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Marc A. Hebert's Money Sense: Creating a will is the place to start when estate planning

June 16. 2017 10:40PM

Estate planning is an essential part of personal finances. This is true no matter how wealthy a person is. It is a process in which an individual specifies how their money and other property should be managed during life and after their death.

Let's start with the basics. What is an estate? It includes all the property you own. This is outright ownership or jointly with someone else. Examples include your home, bank accounts, stocks, cars, and jewelry. Management of these through all life events is the goal. This means, even if you are incapacitated, your finances are under control.

A related issue is the type of medical care you want to receive if you cannot communicate those wishes. Typically during the drafting of estate planning documents, medical directives also are prepared.

Estate planning requires some soul searching. Here are a few suggestions to start the process:

Make a financial plan. Understand your finances. Review your family situation.

Make a will. It is the place to start your estate planning. Make sure it fits you and your financial structure. A will details what property you wish to leave to family, friends and organizations. It also allows you to name someone to act as a personal representative to manage the process. This person will pay any debts, taxes and make property distributions according to your wishes. A will is a basic estate planning document, and one that everyone needs.

Establish guardianship for your children. This allows you to have a say in who will raise your children should you and your spouse both die. Your will is the document that allows you to designate a guardian.

Create all necessary directives. These directives include durable powers of attorney for finances and health care. This will allow you to appoint people you trust to take care of your finances and make health care decisions should you be unable to do so. If you don't have these, the courts will step in and appoint someone to manage your finances, and you could end up with a person unfamiliar with you and your situation.

Consider a trust. A trust allows the funds to be managed by a person or group, for the benefit of others, according to the provisions included in the trust document. It might come into play in blended families, children with special needs, and situations where control over the funds for an extended period is desired. You might not want your 19-year-old to have that much money all at once!

Review beneficiary information. Certain assets, such as life insurance and retirement accounts, pass to others by beneficiary designation. It is important to make certain these are current and in agreement with your estate planning documents.

Funeral arrangements. Final arrangements can be detailed. This could include whether you want to be buried or cremated. You might also indicate whether you want your organs donated.

By the way, if you don't get around to doing any planning and have no documents, the state will provide a plan for you. It just might not be the one you wanted.

Having estate planning documents in place can be liberating. You have the peace of mind that your family is relieved of some of the burden of having to make choices when they don't really know your wishes. Just make sure your executor and/or attorney-in-fact has access to the documents once prepared.

Periodic review of your plans is necessary. Has the estate tax law changed? Has your situation changed? Are your plans still in good order?

Marc A. Hebert, M.S., CFP, is a senior member and president of the wealth management and financial planning firm The Harbor Group of Bedford. Email questions to Marc at Your question and his response might appear in a future column.


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