What comes to mind when you hear the term "estate planning?"
If you're like many people, you know it has something to do with having a will. You’d also be correct if you said it involves making certain other types of arrangements affecting what happens once your life has ended.
A good estate plan goes further and addresses many aspects of your current situation, as well as how to thrive in the years to come. Consider this definition:
Caring for yourself and your assets while you are living, and providing for the transfer of assets to other persons and entities – both during your life and afterwards.
Why do estate planning?
Very few people wake up in the morning and wish they could spend the day working with their attorney to create an ‘estate plan.’ However creating (or updating) a plan is among the most important things you can do. When you do, you can:
- Ensure the property you have accumulated over your lifetime goes exactly where you want it to go and when. If you don’t have a will or living trust, the state has a distribution plan for you, which may or may not be in accordance with your wishes.
- Give directions to be followed in case you become incapacitated and can’t make decisions for yourself.
- Organize your affairs and designate who will handle them when you are gone.
- Appoint a guardian for any minor-aged children.
- Provide for any special needs your loved ones may have.
- Minimize possible estate taxes and costs.
- Specify the type of funeral arrangements you would like.
- Remember and provide for friends, pets, and organizations you care about but are never a part of the default state distribution scheme.
By planning, you also make things easier for your family. If something happens to you, it will be a very difficult time for your family members and other loved ones. How wonderful it would be if they knew exactly what you wanted to have happen and have the means at hand to follow your wishes. Consider the planning you do now to be your final future gift to your loved ones.
While estate planning can entail some difficult choices and means confronting uncomfortable issues, it does provide a sense of relief and peace of mind when it is done. You’ll know that you have done your best to plan and provide for yourself and for loved ones, as well as the causes you’ve cared about during your lifetime. There is great satisfaction in knowing what your legacy on earth will be.