Financial Freedom in Retirement Blog

We believe today's saver deserves much more! Improper alignment of financial tools with your needs and preferences is the major source of missed opportunity, disappointment and regret.
And you know what? It doesn’t have to be that way!

By: George Wells


October 30, 2018

What is Estate Planning and Who Needs It: What Happens When I Die

Topics: Estate Planning

If you have any assets at all, you need an estate plan. If you become sick or incapacitated and are unable to work, or if you die, you want your heirs — not the government — to receive your assets, your “stuff.” It is critical that you do your estate planning while you are healthy. Please don’t wait until you are sick. It will be much more difficult at that point.

What Is an Estate? All Your Stuff.

  • In the legal context, an “estate” refers simply to everything you ownyour stuff. It includes your home, your clothes, the things in your house, your car, your bank account, and your retirement account. Any account or asset you own is your estate.
  • When many people think of an estate, they think of a huge mansion on many acres behind a big iron fence. Unfortunately, that image makes the concept of estate planning confusing because even people who do not own mansions have estates.

What Is Estate Planning?


In the legal context, estate planning means planning what will happen to everything you own when you pass away. It is a legal process to take care of people and their property when they can’t do it themselves, either because they’re incapacitated or deceased.

Under the American legal system, when a person reaches the age of 18, no one else can make decisions for him or her. This is so fundamental that we don’t even think about it. If I’m 17 and need to go to the doctor to have surgery, the doctor has to ask my parents for permission to do the surgery, and they have the right to give legal consent. But once I turn 18, no one else can make medical, personal, legal or financial decisions for me. If you’re married, you have to consult with your spouse if something bad happens to you, and that can be a problem in some situations.

An 80-year-old who has dementia and doesn’t know what he owns anymore will no longer be able to pay his bills. If he doesn’t have an estate plan in place, someone can’t just come in and take over his accounts. State laws that govern situations like this can protect vulnerable adults but are not always the best solution to the problem. That’s why it is so important that you take the bull by the horns and put an estate plan in place while you are healthy. Deal with these potential situations now because they can affect you and your family in a significant way.

Who Needs an Estate Plan?

If you do not have an estate plan and you die, the state you live in is going to determine where your stuff will go. Every state has rules in place.


Everyone needs an estate plan, even 18-year-olds because once they turn 18, no one else can make their medical decisions for them. They at least need to appoint someone to be their patient advocate. Otherwise, if they die, there can be a probate court guardianship. But most 18-year-olds aren’t focusing on estate plans; they’re busy going to college and starting their careers. People are usually most interested in this topic when they have children and as they get older and accumulate accounts and assets.

When Should I Get an Estate Plan


People tend to think that estate planning involves what happens when they die. Death is certainly a big part of it, but the most important part is what happens if you become sick and then incapacitated and can’t make your own decisions. If you are unable to handle your money or tell the doctor what kind of treatment you want, you need to have a plan in place for who will make those decisions for you.

  • If you are married, it’s easy to think that your spouse will make all your decisions for you. Incapacity is a problem, even for married couples. Let’s say a married couple purchased a home back in the 1970s, when they were in their forties, and now it’s 2018.
  • They are in their eighties, and the husband has dementia. The wife feels that they need to move to a retirement community or into assisted living. They no longer need the big house they raised their children in. When they bought the house back in the seventies, they put both their names on the deed.
  • That means that when it comes time to sell the house, they both need to be able to sign the deed, which is the document that transfers the title of the home to the new buyer. If the husband has dementia and doesn’t know what’s going on, he doesn’t have the legal capacity to sign his name. In some cases, a person physically cannot sign his or her name.
  • In that situation, even though it’s a married couple and they own an asset jointly if no estate plan is in place, the wife might have to go to probate court to get the authority to sell their home. That would make a stressful situation even more stressful — and more expensive.

We recommend that you avoid letting that happen. It can be very expensive to go through the court process. Plus, your stuff can end up in the wrong hands. Make it a priority to create your estate plan now, whether you have a giant estate with multiple homes, multiple businesses, and collector cars or if you have a tiny apartment with maybe a cat, some clothes and some old furniture. Everyone needs an estate plan.


In summary, who needs an estate plan?

  • Everyone already has an estate plan. If you do not create an estate plan with an attorney, then you will default to your state’s laws regarding the handling of estates.
  • Every state has pre-arranged a method of getting your stuff where it belongs if you are not able to make decisions on your own or once you pass away if you haven’t done any advance planning.

Next: Challenges Families Face Without an Estate Plan.


How Does FundMax Help with Estate Planning?

FundMax is an educational resource. If you don’t feel like you have fully exploited us for all the knowledge and insights we offer, do some more research. We provide these insights through FundMax, a free retirement resource guide that helps people optimize their retirement funds and avoid regret by making sure they are “all set” for retirement. At FundMax, you can ask questions, watch videos and read some things. We encourage you to explore a lot of material on the site so you can get an idea of our style. You will likely get a lot of your questions answered. If you still want to talk to us; you’re welcome to contact us. We are happy to answer your questions.

This is a resource we have developed for you, for your benefit. Make no mistake, we are a thriving financial firm that makes money. We are a financial firm that takes new clients. But first and foremost, we consider ourselves a significant resource to the public…mostly people we will never need to meet. We believe in providing you with valuable information at no charge. We know it can be intimidating to ask someone for help, especially if you’re a do-it-yourselfer or if you feel like you’re all set. We are here for you as a resource, and we get a lot of clients as the indirect result.


You can further explore our Estate Planning insights:

View our Estate Plan Index page. It's basically a road map to all of our most popular estate planning insights.

You can download our eBook 'The Ultimate Guide to Estate Planning'

This free educational ebook explains estate planning as simple and complete a possible.

New call-to-actionReady for a Financial Professional?

Okay, so you’re officially fired up about estate planning, but maybe you’re unsure about how to get started. No problem! We understand that all the information involved in estate planning can be a little intimidating at first.

  • Do you have questions, comments or suggestions after viewing our Estate Planning Guide? 
  • Would you like to video chat or talk on the phone to someone at FundMax before meeting with an attorney?
  • Would you like us to recommend an estate planning professional?

Referrals for Estate Planning 

If you’re looking for a referral from a tax or legal professional, we will refer people to you if we’re comfortable with them and if we and our other clients have had good experiences with them. We will not refer anyone to you if we are uncomfortable about doing so.

You might need us, but you might not. Maybe you came here and got all the information you need, and you are thinking, “I feel a little guilty because I got all this stuff from them and gave them nothing.” Well, share it. Send it to somebody else…or don’t. We are here for you. We are here for your benefit, so feel free to use all our materials to learn something new. We will be here, still serving you and giving you information.

If you have questions you would like to have answered that you think others might benefit from as well, contact us, and we will likely create a method to answer those questions as well. You are probably not the only one with that question. 

Let's Talk

  • Share:
Add A Comment Here