One of the most confusing parts of getting older is estate planning. Many people don’t know what estate planning entails. Not to mention how to go about planning their estate. Plus, it’s often associated with lawyers and hefty fees. But estate planning is one of the most important things you should do. It can also be easier than you might think.
What is Estate Planning?
Before talking about the ins and outs of planning your estate, we need to understand the basics of what estate planning is.
Sometimes, we think of estate planning as having a will. While a will is part of it, estate planning goes much further. If done correctly, it offers a holistic approach to ensuring your finances and assets are handled the way you want when you pass away. Estate planning can also be beneficial if you are in a position where you become incapacitated or are unable to make your own decisions. One way to think about it, your will is one piece of your full estate plan.
In 2025, only 24% of Americans have a will – a number that has been decreasing each year. There are two common reasons people say they don’t have a will. The first is that they know they should have one and just haven’t done it yet. The second is that they don’t think they have enough money or assets to need one. But estate planning is important for everyone, regardless of how much money or assets you think you may have. Estate planning isn’t just for millionaires. It’s for anyone with a car, house, family, or any amount of money. Estate planning can also be a lot easier and more affordable than you think. You can even find tools to create a will online for free.
Having a will or estate plan is only as good as the information it contains. Think of it as a living document. Something that evolves over time. While estate planning is a legal process, that doesn’t mean it’s set in stone. Once your estate planning is done, you should routinely review it. You may want to make adjustments for things like the death of a spouse, birth of a grandchild, or changes with your finances or assets.
Why is estate planning important?
If you think about the importance of estate planning, the first things that come to mind might be protecting your assets or leaving something behind for your loved ones. Those are both important reasons to consider estate planning. Estate planning can protect you and your assets, provide for your family, and preserve your wishes. Having an estate plan can make sure your money and assets are divided the way you want. If you have minor children or grandchildren in your custody, you can establish who you would like to take care of them in your absence. Your pets can even be included in your estate planning so you know they’ll always be taken care of.
Estate Planning Tools
Now that you know more about what estate planning is, let’s take a look at some of its tools.
Wills
The most common estate planning tool is a will. It’s the easiest to understand and create. It can also cover nearly everything most people need in estate planning.
A will is a legal document that can protect your wishes after you pass away. It documents all your money and assets and states what should happen with each. Your will can include things like the money in your bank or investment accounts, your house and car, and treasured items, like family heirlooms or baseball cards. An important part of your will is choosing an executor. This is the person (or people) who will be responsible for carrying out your wishes. If you don’t have a will, the state gets to decide what to do with your assets.
Trusts
Trusts are more complicated than wills. They play an important role in estate planning, though. Like a will, a trust allows you to establish how your assets are distributed. However, there are two key differences. Estate taxes and probate.
With a trust, your assets aren’t subject to estate taxes. That means your loved ones and the causes important to you get more of what you leave them. Trusts also don’t have to go through the same probate court process as wills. That means your assets can be distributed more quickly and probate court fees can be avoided. Instead of choosing an executor like with a will, with a trust you name a trustee. There are also several different types of trusts, each with their own benefits and requirements.
Unlike a will, which you can create with tools online, you need a lawyer to create a trust. Trusts are more complex and require professional expertise to properly establish. In general, a trust is more expensive to create than a will. But, depending on your financial situation and assets, a trust can be a wise estate planning tool.
Advanced Care Planning
Part of your estate planning should also include advanced care planning. Wills, trusts, and most other estate planning tools focus on what happens after you pass away. In contrast, advanced care planning focuses on the things leading up to passing away. Also called advanced directives, this is most often a living will and power of attorney.
Living Will
Don’t let the name “living will” confuse you. Unlike the traditional will we described above, a living will doesn’t include information about your finances or assets. A living will outlines medical care and treatments that you do and do not want. Your living will tells your loved ones what you would want if you can’t make decisions yourself. There are a wide range of things you can choose to include in your living will. Often, people include things like their preferences for life-sustaining interventions such as ventilators and feeding tubes. Other common things included in a living will are preferences for different medications, palliative care, and organ donation.
Power of Attorney
Power of attorney is the most well-known part of advanced directives. But there’s still a lot of confusion about it. Power of attorney is a legal document that authorizes someone of your choosing to make decisions on your behalf. There are several options that are useful in different circumstances. Most types of power of attorney allow someone to act on your behalf from the time it’s signed until you either are unable to make your own decisions or decide to revoke it. However, a durable power of attorney allows them to make decisions on your behalf even after you are unable to make your own decisions, such as in the event of a medical emergency. There is also a type of power of attorney, called springing, that doesn’t go into effect until you are unable to make decisions.
There are different focuses for power of attorney. The two main types of power of attorney are medical and financial. You can choose for those to be the same person or different people. Your medical power of attorney can make healthcare-related decisions, while your financial power of attorney can make decisions related to your finances. For each type of power of attorney, you can also choose which timing makes the most sense. For example, you may want your healthcare power of attorney to be durable so that a loved one can be involved in your medical care now and in the future. But you may not want to involve someone in your financial decisions until absolutely necessary and choose to make your financial power of attorney springing.
Regardless of what you decide for your advanced directives, there are three things to consider.
- Share your decisions with your loved ones so they can follow your wishes the best they can.
- Give copies to your physician(s) so they know what you want and who they can talk to.
- Talk to a professional, such as a lawyer or an aging services professional, to answer any questions and ensure you make the right choices for your situation.
Estate Planning and Charity
A key part of estate planning is what happens to your things when you’re gone. For some people, that includes leaving something to the causes important to them. In 2024, nearly $43 billion was given to charity through estate planning. If there are causes you care about, or charities you give to currently, you can continue to support them after you pass away. It’s easy to make charity part of your estate planning. When you choose your beneficiaries, usually loved ones or friends, you can also add charities. Like with other beneficiaries, you can choose to leave a set amount of money to each, or you can give a percentage of your entire estate.
Estate Planning with The Ohio Masonic Communities Foundation
At The Ohio Masonic Communities Foundation, we’re proud to offer you tools and resources as we live our mission to help our communities thrive. We believe everyone should have an estate plan – without it costing you an arm and a leg. That’s why we’ve partnered with Giving Docs, giving you access to create a free will online. Whether you choose to include charity in your estate planning or not, this tool is free for you to use. You can also use it to create your advanced directives and power of attorney. Already have a will and need to update it? We’ve got you covered with that, too.
Our Legacy of Roses recognizes those who have made a lasting commitment to our mission through their estate planning. We’re honored that our Legacy of Roses members have chosen to support our mission and help our communities thrive in such a personal way. If you want to learn more about our estate planning resources or our Legacy of Roses, we would love to talk to you.
The Ohio Masonic Communities has three senior living communities across the state of Ohio – Browning Masonic Community in Waterville, Ohio, Springfield Masonic Community in Springfield, Ohio, and Western Reserve Masonic Community in Medina, Ohio. If you are interested in learning more give us a call at 1 (877) 881-1623 or contact us here.