A Financial Planner Shares What He Wishes Everyone Knew About Estate Planning

Close-up shot of senior husband and wife sitting at cozy office and studying life insurance policy, female agent assisting them.
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Estate planning can be complicated, but it’s important to have a plan in place to ensure you leave the financial legacy that you desire. This may mean having uncomfortable conversations with loved ones and making sure you have written instructions for end-of-life decisions and distribution of assets.

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GOBankingRates spoke with Mark Schrader, a certified financial planner at TIAA who lost his mother late last year, about what he learned through his first-hand experience and the financial planning advice he would give on critical estate planning steps.

Have Those Important Conversations About Your Wishes

Talking to your loved ones about your estate and end-of-life plans can be uncomfortable, but it will ultimately be to their benefit.

“I think the No. 1 thing that Mom’s passing illuminated for me is the importance of having conversations ahead of time,” Schrader said. “When it came time to make decisions for Mom, my brother and I knew exactly what she wanted, whether it was regarding her care while she was incapacitated in the weeks leading up to her death or her specific desires after she passed away.

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“One moment that sticks out in my mind is when my brother and I were sitting at the table at the funeral home and the funeral director presented a list of questions regarding decisions that we needed to make. This was one of the most emotional points of our lives,” he continued. “I can’t imagine how it would have gone if we didn’t know our mom’s final wishes.”

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Get All of the Necessary Documents in Order

There are a few documents you should have prepared as part of your estate plan.

“First is the will,” Schrader said. “This is the main document that details how you want your assets distributed. This is usually prepared by an attorney, but there are also online options that can be satisfactory for a simple estate. If you don’t have a will, your state will determine how your assets will be divided.”

You should also have documentation that provides your loved ones with life insurance and account information.

“Be sure to leave instructions, whether physical or virtual, so family members know how to find important documents when they need them,” Schrader said.

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In addition to documenting your wishes for your estate, you should also document your end-of-life wishes.

“My mom had a power of attorney — that’s a legal document that allows another person to make decisions for you,” Schrader said. “These decisions can be related to your finances, but there are also healthcare decisions that may need to be made. You can also prepare a living will that outlines your preferences for medical care if you can’t make decisions for yourself. What if you’re incapacitated because you’re fighting dementia? Or in a coma? Or terminally ill? A living will guides doctors and caregivers so your family and friends don’t have to navigate difficult choices at possibly the worst time of their lives.”

The living will also explains what happens if you’re being kept alive by a machine.

“What if the machine could keep you alive for years? If you’re permanently unconscious, do you want to be kept alive? You can address those types of decisions in a living well,” Schrader said. “You should also decide whether you want a Do-Not-Resuscitate order (DNR), which a physician would need to write. Hospital staff always try to help patients whose hearts have stopped or who have stopped breathing. Do you want that? If so, for how long? This can also be part of a hospice plan. Do you want medical staff to shift the focus from prolonging life to instead maintaining comfort?”

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Preparing a DNR — if you so choose — can help your loved ones make difficult end-of-life decisions.

“On one visit with Mom a few months before she passed, she adamantly showed me her DNR and where she kept it right on the coffee table in the middle of the den,” Schrader said. “She wanted to make sure the DNR was always out and visible.”

Assign Beneficiaries to All of Your Accounts

Assigning beneficiaries is another way to ensure that your wishes are carried out.

“People really don’t think about the importance of assigning beneficiaries,” Schrader said. “Every time you open an account or purchase property, you’re creating additional items that need to be part of your planning. No matter what you say in your will, a beneficiary supersedes everything and passes outside of probate. Let’s say your loved one wanted to give some of her/his account to charity. If the beneficiary doesn’t do that, it won’t happen.”

Consider Creating an ‘Ethical Will’

Schrader’s personal experience with his mother’s passing taught him the value of having what is known as an “ethical will.”

“The simplest way to think about an ethical will in the estate planning context is in comparison to the will itself,” he said. “Whereas a will is there to pass down physical and sometimes monetary holdings, an ethical will is intended to pass along ideas that are important to you. An ethical will is a document that allows you to share your values with your heirs.”

This can be more informal, and take the form of notes to your heirs to tell them stories you want them to know.

“My Mom was a coach and a guidance counselor during the course of her career, so she was great at having conversations with people about what is important,” Schrader said. “If you were around her for more than a few minutes, she would know your life’s story. While she didn’t have her own specific document, I feel she shared her values and intentions with us through ongoing conversations along the way. An ethical will or values conversation can be a great way to make sure that the important things in life are communicated.”

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About the Author

Gabrielle joined GOBankingRates in 2017 and brings with her a decade of experience in the journalism industry. Before joining the team, she was a staff writer-reporter for People Magazine and People.com. Her work has also appeared on E! Online, Us Weekly, Patch, Sweety High and Discover Los Angeles, and she has been featured on “Good Morning America” as a celebrity news expert. 
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