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More than half of Americans are missing a critical step in their retirement plan—a step that could be putting their legacy and loved ones at risk. Despite knowing estate planning is important, many people delay or avoid putting the right protections in place.

In this episode of Money Wisdom, Nicholas J. Colantuono, CFP® shares what essential estate planning documents you need. He also explains what happens if you don’t have them and how proper planning can protect your assets and your loved ones.

Having Your Wishes and Values Honored

Estate planning helps you stay in control of where your assets go, who they go to, and when. Having important legal documents like a will can streamline what is otherwise a lengthy, costly, and stressful process.

A living will expands on this by including additional components like a power of attorney and medical directive. A power of attorney allows someone to make financial decisions on your behalf if you’re unable. Similarly, a medical directive outlines your preferences for healthcare if you can’t speak for yourself.

Reducing Legal Complications and Taxes

Without a proper estate plan, you may also face unnecessary legal complications and costs. Probate is the legal process in which the courts determine how they distribute your assets. It can also invite claims from creditors or even disputes among family members. With the right trust planning, you may be able to minimize or avoid probate altogether.

Taxes are another major concern, especially in the Northeast. In Massachusetts, for example, the estate tax applies to assets above a $2 million exemption. But with proper estate planning, you can help preserve more of your wealth for your heirs.

Providing Clarity for Your Loved Ones

A well-documented plan clearly communicates your wishes and leaves no room for confusion. This can help prevent family conflict during what is already a difficult time. By putting everything into writing, an estate plan can ensure everyone is on the same page.

Preserving Your Legacy

After decades of building wealth, you want to make sure your assets go to the right people and/or organizations. Protecting your legacy can also make things easier for your family by avoiding added stress.

While these conversations may be difficult, they are essential to have. Whether that’s with your advisor, your estate planning attorney, or your family, there’s no time like the present to get things started.

Ready to outline your wishes with an estate plan? Get your free copy of The Greatest Gift guide by texting “GIFT” to 800-757-0436.