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2 Important Stages of an Estate Plan

Let’s put all the legal jargon aside. In its simplest form, estate planning is the preparation for transferring assets to your loved ones or beneficiaries in case of your death or illness.

Typically, your estate plan includes homes, cars, investment portfolios, life insurance, art and collectibles, and other financial assets and belongings.

Before and After Death

Estate planning can be separated into two stages.

1. Before Death

These are examples of decisions to make in this stage:

  • What are your wishes in cases of a medical emergency? These are instructions related to your wish to be put or kept on life support.
  • What are your wishes in case of incapacitation? These are instructions for who will execute and how to manage your financial affairs if you become ill, injured, or unable to manage your finances due to age.

2. After Death

These are examples of the decisions to make in this stage:

  • Who will take care of your children? If you have minor children, you can assign guardianship and provide instructions.
  • Who do you want to leave your assets to? Identify and instruct how your wealth will be given to your beneficiaries.

These decisions should not be left to the state’s laws where you reside. Your estate plan will give you peace of mind that your wishes will be carried out exactly as planned.

Stage One: Before Death

This part of your estate plan affects both you and your loved ones. If you become physically incapable, you can assign someone to fulfill your wishes.

In this stage, you may need to prepare two documents.

  1. Durable Financial Power of Attorney (POA): This document will allow you to designate an agent if you cannot handle your finances. Without a POA and a designated agent, it can be hard for someone to do things on your behalf, such as paying bills and filing taxes.
  2. Advanced Health Care Directive: This document is similar to a Financial POA and allows someone to make medical decisions for you. This person is referred to as your agent and can make decisions such as choosing a doctor, accessing medical records, and putting you on life support.

Exercise care before naming multiple people as your agents instead of a single person with total authority.


  • Depending on how you structure your documents, each agent’s signature may be required for every decision, so consider their schedules or locations before assigning them roles.
  • Ensure your banks and doctors have copies of the documents on file after you have executed them; otherwise, they may deem them invalid.
  • Some entities may require additional documentation or have specific procedures for dealing with agents. Double-check ahead of time to avoid putting your agents in a difficult position.

Stage Two: After Death

After you pass away, the second stage of your estate plan deals with what to do.

An estate plan can help to avoid chaos and messiness by clearly outlining the key roles and documents.

Joint Owners and Beneficiaries

Joint Owner: If married, this is the most common way to title your accounts as joint accounts. Your spouse or joint owner of the account will be the sole owner when you pass away.

If you are a joint owner, you can avoid the state’s process of distributing your assets following your death.

Adding other people, such as your children or grandchildren, as joint owners of your property for the sole purpose of avoiding probate can save time and money, however, be careful.

It will give them control of any assets in your estate while alive.

And doing so may subject you to gift taxes and prevent them from getting a stepped-up basis.

Beneficiaries: Most assets with beneficiaries don’t have to go through the court probate process. Your estate plan is simplified as more asset types and property allow beneficiaries. Such as:

  • Bank Accounts: Complete a form with the financial institution.
  • Investment Accounts: Complete a form with the custodian of the account.
  • Retirement Accounts: Such as 401ks and IRAs allow you to add beneficiaries.
  • Life Insurance: You can designate beneficiaries to any insurance plan.
  • Real Estate: Many states allow a Transfer on Death (TOD) Deed.

To prepare your estate plan with beneficiaries, inquire with each financial institution or custodian.

Your Next Steps

Prepare your estate plan to help you gain peace of mind and protect yourself and your loved ones in cases of sickness and death.

Now that you understand an estate plan better, it is best to speak with a professional to help you through the process.

Learn more about the estate planning process.

Jason Vitug

Jason Vitug is a bestselling author, entrepreneur, and founder of and His purpose to help others live their best lives through experiential and purposeful living. Jason is also a certified yoga teacher and breathwork specialist and has traveled to over 40 countries.

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