6 Reasons Why You Need An Estate Plan Today + A Simple Solution

Do I really need an estate plan if I’m not rich? This is a question I see over and over again. In today’s post, I’m going to tell you exactly what you need and why.


Estate planning instructions provide directions and will answer two types of questions at two phases of your life.

When you are alive – Who can make decisions for you (medical and financial) if you become incapacitated?

When you die – What do you want to happen to your minor children if you have any as well as your property?

We tend to focus a lot on the second part of the equation, but the first part is more critical. It’s the reason why everybody who is a legal adult needs an estate plan. A will is a part of an estate plan.

Why You Need An Estate Plan Even Though You Are Not Prince

The estate plan consists of a will, the power of attorney, and advanced health care directives (health care proxy, living will, mental health directive, etc.). In some cases, you might include a trust. I’ll address trusts in a separate post. 

Each of these documents plays a critical role in your overall plan, but they work together to complete the plan. 

Over the next couple of paragraphs, I’m going to discuss why you need each of these documents and the consequences of not having them.

Dying Intestate – A Nightmare For Loved Ones

We’ve heard horror stories of rich people who died intestate – without a will. A LegalZoom article has a list of 10 famous people who died without a will and details what happened to their estates.

The country of origin and residency are irrelevant when it comes to how these cases are solved. Dying without a will means the final decisions are made by the legal system in place. Below I discuss two examples from the article.

When Stieg Larsson, the author of  “The Girl with the Dragon  Tattoo” died in 2004 without a will, Swedish law dictated that his estate was to be divided between his father and brother, leaving nothing to his lifelong partner of 32 years.

Closer home, it took more than 30 years to settle Jimi Hendrix‘s estate after he died in 1970 at the age of 27 without a will.

The people who end up suffering are those left behind so consider your estate plan an expression of your love for your family and friends.

Guardianship For Minor Children – Appointed In The Will

If you don’t appoint guardians for your minor kids, and you pass away or become incapacitated, the state will decide who is to take care of the kids. Research shows that 64% of parents with kids under 18 don’t have a will.

It’s even more critical for foreign-born families with minor kids without family in the US. In this post, I address possible reasons why parents don’t have a will, as well as how immigrants can appoint international guardians

Somebody To Take Care Of You And Your Affairs In Case Of Incapacitation

One of the pushbacks, I get is from folks, who don’t think they have enough wealth to warrant spending thousands of dollars on estate planning.

But not having somebody appointed to take care of you and your affairs if incapacitated is more dangerous and outright risky.

The following estate planning documents will ensure your wishes are fulfilled.

Advanced Health Care Directives – Estate Plan Core

Advanced health care directives are a set of documents/items that provide instructions on how you want medical decisions made on your behalf if you become incapacitated. They are: –

Health Care Proxy

This is also referred to as medical power of attorney.

It appoints a trusted person, known as your health care agent, to legally make health care decisions on your behalf. You are allowed to name a primary agent as well as an alternate agent.

Your healthcare agent can access your medical records to the extent permitted by the HIPPA privacy rule.

Living Will

This is a set of instructions, that document what type of medical care you want if you are unable to make decisions or express your wishes.

This includes end-of-life decisions. For example, you can specify what type of care and treatment you want if you have a terminal condition or are in an irreversible coma. Your health agent will be your advocate to ensure your wishes are carried out.

The provisions can also extend to after-death instructions, including things like an autopsy, donating your organs, and the final arrangements for your burial.  

Within the same document, you can add other provisions. For example, a desire to be taken care of at home, instead of in a nursing home.

The healthcare agent you appoint is responsible for handling all these decisions, including making payments for your care.

Mental Health Directive

This is an optional document. It provides instructions about the care you’d like if you have a mental illness and are unable to make decisions for yourself.

Alternatively, you can appoint an individual to make these decisions on your behalf.

Power of Attorney – Financial Affairs

This document assigns a trusted person the power to act on your behalf in legal and financial affairs. This does not extend to the health care directive. Within the document, you can exclude certain transactions.

You can make it durable (permanent), or springing (kicks in, based on conditions that you select, for example, you become incapacitated or on a certain date).

You can have more than one agent acting on your behalf or a primary and an alternate.

College Students – They Need an Estate Plan

This paragraph is specific to parents of high school seniors or college freshmen. At 18 your kids are officially adults and can make all types of legal decisions for themselves.

Suddenly doctors won’t talk to you anymore about your kids, and you are not able to make health care decisions for them. Sit down as a family, explain to them the need for these documents, and help them draw up the will.

The critical parts are the medical directives and the power of attorney.

They allow you as the parent to continue being the trusted person who’s called upon to assist with financial issues and also be an advocate for your child in case of medical issues.

Trust & Will – Simplifying The Estate Plan Process For You

One of the concerns I get from clients and prospects is the high legal costs of creating a will and the other documents that go along. This is a valid concern, as it can cost a couple of thousand to create a simple will.

After a lot of research and due diligence, I’ve partnered with Trust and Will to help you complete your estate planning documents online. The service is perfect for those with small estates (up to 5 million dollars)  – your estate consists of everything you own.

If you’ve been holding off on completing your estate planning, because you thought it was too expensive, or you simply didn’t know you needed to, don’t wait another day, please reach out, and let’s discuss if this is a viable option for you.

Estate Planning If In A Cross-border Situation

The above situation is specific to the US. Also, keep in mind that estate planning (wills, etc) is specific to a state.

So this means everybody in the US needs the basic documents.

If you have overseas assets, or you want to involve US non-residents, then we need to work with a cross-border professional. Some of this will involve having wills drawn up in your home country and aligning them with the US solutions.

The first step on this journey is the awareness that this is the required path.  I’m working on a separate post with more details for US non-citizens. Stay tuned please.

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Disclaimer:  This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for the purchase or sale of any security, investment advisory services, or legal advice. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Jane Mepham and all rights are reserved. Read the full disclaimer here.

Jane Mepham, CFP® is a Fee-Only financial planner who loves simplifying the complexities of the U.S. financial system for immigrants and foreign nationals on work visas and those in tech. She’ll work with you to map out a personal strategy that addresses all areas of your financial life while avoiding key financial mistakes that could derail your American dream.

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