We are so busy living our day-to-day lives that we are forgetting to adequately plan for the future. Statistics show that almost half of US adults don’t have a will. What will happen when all of a sudden you don’t exist? Will the estate you accumulated all your life be put to good use?
Life has no guarantees and planning for the future is necessary. Estate planning does just that. It is the efficient planning for the disposal of your entire estate. Whether your estate comprises of several properties, bank accounts, or just your personal possessions, it will be passed down to a family member or loved one one day. Estate planning helps you leave a good legacy behind because every bit of your estate counts and is used as you would have it used. Here are some things to know about estate planning.
Essential elements for estate planning
- A guardian plan for your children- If your children are minors, you should have a plan for who will raise them if both you and your spouse passed away. You also need a plan for how your life insurance payouts and any other money you leave behind will be used for your children’s benefit.
- A will- You write a will to state how such assets as your home, car, bank accounts, etc will be distributed if they are not under a trust and lack beneficiaries.
- Executor- An executor is the person you choose to carry out your wishes, as stipulated in the will.
- Trust- A living trust grants you the right to bypass the public probate process when passing on your estate. It also allows someone else to take care of your affairs in case you are incapacitated.
- Medical power of attorney- It names a person who will make your medical decisions if you can’t make them yourself.
- Living will- A living will provides direction to the person you have named in your medical power of attorney. It states what you would want under different circumstances.
- Financial power of attorney- It gives someone the power to manage your finances. You can either limit it to some functions or allow them to manage all your finances.
Other things to know about estate planning include:
Estate planning organizes you matters
Estate planning helps you organize all your assets as well as the titles and designations that should be given to your beneficiaries. This is important because lack of an estate plan can cause chaos and property fights among the beneficiaries.
If you don’t do estate planning, the state will plan for you
If you are declared incapacitated and you have no estate plan, the courts appoints a guardian to oversee your estate and also controls the use of your assets. If you die without a will, the estate law determines who inherits your assets. State laws are not always in accordance to our wishes. Your spouse and children stand to lose a lot in the absence of an estate plan.
Estate planning doesn’t have to be expensive
Whether you are wealthy or not-so-wealthy don’t wait to get lots of money to start planning for your estate. Sure, you need an attorney to guide you through the planning process, but when to put the wheels in motion is completely up to you. You can start small; save, get a life insurance policy, write a basic will and eventually, you will have an action plan in place.
Plan your estate now
Planning is essential in everything we do. Don’t wait to grow old so that you can plan your estate. Form an estate plan and monitor it for suitable changes as time goes by. And you will be prepared for the uncertain future.