The Woeful Inadequacies of Traditional Estate Planning: The Four Critical Questions You Need To Ask Yourself

Written By Steps To Faculty Published June 8th, 2010

When I mention the words, estate planning, most people think of meeting with an attorney and drafting legal documents. Traditionally, those documents include a will, durable power of attorney, health care proxy and perhaps a trust. After you draft these documents, you meet to sign them, then you put them somewhere “safe,” cut a check to the attorney and breathe a sigh of relief because you finally have things covered. All is well and your estate is perfectly in order, right? WRONG!

Too often the drafting of legal documents is confused with developing an estate plan. Sure, legal documents are part of an estate plan, but they are not “the” estate plan. You need to make sure that you have everything in one spot. If not, you could cause yourself some real problems. That’s why 98% of all estate plans fall short. That’s why you have debacles like the Terry Schiavo case and the Ted Williams dispute. In order to make sure that these sort of things don’t happen to you, you have to have a plan. Most people plan out what should happen in the event of their deaths. What if you are disabled or mentally incapacitated? Effective estate plans must be drafted in order to account for these kinds of contingencies.

If you wish to have an effective estate plan, you must answer four extremely critical questions:

Step 1. What documents do I need?

You need a will, durable power of attorney, and health care proxy. Additionally, you need an original marriage certificate, military discharge paperwork, health and life insurance information, beneficiary designation forms, deeds, and appraisals. Another necessity you need to have is a listing of important contacts with telephone numbers.

Step 2. How will my beneficiaries find these documents?

We all have our own personal and unique filing system that has worked well for us over the years. That’s fine. You should use your own unique filing system, whatever works for you. However, you do need to create a system that “unlocks” your personal filing system. For example, if something ever happened to you, how would your beneficiaries even know you had a safety deposit box, let alone the location of the bank or key?

Step 3. Who should have access to these documents and when?

I know that’s actually two questions camouflaged as one. Remember, these documents are personal and confidential. Today, we are all too aware of the very real threat of identity theft. Safeguarding these documents and making them available, under specific circumstances, to a select group of individuals will allow you to protect your privacy while still preparing an effective estate plan.

Step 4. Who will best advise my beneficiaries?

Your estate plan needs to address not only your financial assets, but also your dreams, wishes, and values. You need to designate that one person who can capture all these characteristics of your life, someone with whom you have shared those most personal thoughts. At you or your beneficiaries’ time of need, who should be that one call?

Don’t confuse proper estate planning with simply drafting the needed documents or purchasing an insurance policy or special investment product. An effective estate plan can only be accomplished with a well thought out approach that is designed to protect your most important information and guide your heirs. Only then will you have peace of mind in knowing that you’ve done your best for your loved ones and nothing important will be overlooked.


Roger Due

Investing in Your Destiny® & Coaching Program - Wealth Building Summit Dallas, Texas

My name is Roger Due and I am from Albuquerque, New Mexico and I am the owner of the Monsano software company. This has been an absolutely fantastic conference. This is the best I have ever been to.