Estate planning will allow you to be remembered the way you want. To leave a legacy to the ones you love that reflects your wishes and gives purpose to what you’ve accomplished in your life. Without estate planning, that likely will not happen.
You may be wondering, if estate planning is so important, why doesn’t everyone have an estate plan? The answer is part human nature and part misconception.
Human nature prevents us from talking, even thinking about our own mortality. We don’t like to say to ourselves: “Someday I will die or become incapacitated.” For the sake of our loved ones however, we have to deal with this. And because it can happen anytime, we should deal with it now, regardless of age.
People also wrongly believe that estate planning is only for the super-rich. The word “estate” somehow implies great wealth. But the fact is, an estate can be a house and several thousand dollars or a mansion and several million.
It’s simple. Whatever your age, whatever the size of your estate, a proper estate plan will ensure that it is passed along as you desire, with minimum taxes and with no complications or delays for your heirs.
Many people put off making an estate plan because they think it’s going to be too difficult and time-consuming. Well, it will take a little time and effort, but it’s really not all that bad. And when you consider the end result, it’s well worth it.
The hardest part is getting started. Once you do begin, the first thing you have to do is prepare an inventory of your assets and liabilities. This will give you an idea of your net worth. Plus you have to gather all the important papers and documents that could be relevant.
Your next step is to think about your goals and objectives in creating your estate plan:
- Who are your beneficiaries?
- How will you divide your assets among them?
- How will the assets be distributed, i.e. in a lump sum, either right away or at a later date or through payments from a trust?
- How will you deal with significant assets, such as a family business or second residence?
These are just a few of the kinds of issues you’ll have to consider. And before you make very many decisions, it makes sense to gather the family for a group discussion.
So now you know where you stand. You know your net worth and you know what you want to do with it. Your next step is to create a plan of action to achieve your objectives and this is where it can make sense to get professional advice.
A proper Will and a Power of Attorney and a Living Will are always recommended, regardless of the size or complexity of your estate. A Living Will, although not part of your formal Will, incorporates written instructions that become effective when you are no longer able to express your own wishes and must depend on others to do so for you. An insurance policy can also be used in several ways as an effective estate-planning tool.