Where Does Estate Planning Fall In The Financial Order of Operations?

August 10, 2023

In this highlight, we discuss where to factor in estate planning in the Financial Order of Operations.

Want to know what to do with your next dollar? You need this free download: the Financial Order of Operations. It’s our nine tried-and-true steps that will help you secure your financial future.


Alex has a question for you guys. He says, “I’m 32 with two young kids. What step of the financial order of operations does formalizing an estate plan fall? Can’t decide if it’s done alongside emergency savings or as a prepaid future expense. What are your thoughts?”

Neither. Do you agree? It’s neither one of those things. That’s what I thought you would say. You know, once you have kids, right? Again, this is our opinion, but it’s a pretty good opinion and we’re probably right about it. It makes sense to get your estate documents in order because money’s important, tax savings are important, and investments are important. But once you have kids, for most human beings, nothing in this world is more important than those kids. You want to make sure they’re taken care of. One of the things you have to decide is if something happens to me, if I get hit by a bus, if I check out of this life early, who’s going to be the person to step in and take care of my kids if it happens to me and my spouse? That’s oftentimes a hard question to answer. Like, “Oh, it’d be my brother.” And then she’s like, “No, no, it’ll be my sister.” And you’re like, “Oh, no, no, no, no, no, no.” If it’s really hard for that decision to be made while you’re here on this Earth to advocate for your kids, imagine how difficult that decision would be if you’re not here to be the one pouring into that. That’s what a good estate plan, estate document will allow to happen, among a myriad of other things.

So, I’m of the opinion, even Alex at 32 with two young kids, I would put estate documents and that sort of thing as a firm Step Zero, like an early step, like a “do it now” step. Alex is implying that if it needs a step, that means it must be expensive, and I would argue that no, not necessarily. Because at 32, let’s just take somebody who starts at Ground Zero at 32. You know, if you had a great time in your 20s, you’re 32, knowing you got two kids, and you’re like, “Man, I don’t have any money to my name, but I’ve got these two kids. Should I do estate documents?” Heck yeah! But it doesn’t have to be expensive. That’s right. You could go… I mean, there’s all kinds of online web… It could be even free to minimal costs to structure something because nobody guardianship is one of the most important things. And it needs to be formalized now. Look, estate documents and estate planning can get much more complicated and much more expensive, too. But that’s going to be something that happens once you’re at step eight of the financial order of operations or even step nine of the financial order of operations.

So, Alex, this is just one of those things to choose your own adventure. As soon as you have, you know, as soon as you got married, you know, and if you took on a bunch of debt, I would tell you maybe that’s when the estate document discussion, but as soon, especially when kids happen, that’s kind of like playing Monopoly, and you just go ahead and do not pass go, and you have to go ahead and get to the point where you’re doing estate documents. So, don’t try to look for a step that gives you a little more time. This is something you probably need to start working on ASAP. And look, this will be a little somber, a little bit of cold water. One of the things you have to think through is when you are going through these hard conversations, it’s easy to assume it’s not going to happen, right? Oh, I don’t want to have that conversation. I’ll push it off, push it off, push it off. We have sat in too many rooms with surviving family members where that conversation got pushed off and got pushed off and got pushed off. It stinks and it’s hard and it’s uncomfortable and it’s difficult, but it is so worth it. So, if you have young kids, make sure you’re putting that step in place because when you need it the most, you’re going to be happy that those documents were there. For more information, check out our free resources.



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