Why You Need an Estate Plan

It’s Not Just For The Wealthy!

Image by DALL-E

For most people, estate planning is the last thing on their minds. Who wants to think about their death? Who wants to plan out what happens after they die? Isn’t that…morbid?

We also tend to think of estate planning as something only wealthy people have to worry about. We think, I have a will, isn’t that enough? My family knows what I want, I don’t need to plan anything out!

Unfortunately, that kind of thinking is why estates can be tied up in the probate courts for years, even decades, because people fail to plan for what happens after they die. And everything they wanted to go to their children, grandchildren, or charities, goes towards legal fees.

Let’s talk about it….

What is estate planning? And why is it important?

Estate planning is an opportunity for you to make sure that all the work that you’ve done all your life, at the end of your life, goes to who you want and how you want it. It’s an opportunity to plan for your legacy, not just for your lifetime, but your children’s, your grandchildren’s, and their children’s lifetimes.

Your estate includes your property, your vehicles, your investments, and your insurance, in addition to additional assets. Your planning can help make sure those assets are distributed how you want & to whom you’d like them to go to. 

Say, for instance, that you have two daughters that do not get along – like oil and water. If you don’t make a plan, they might end up fighting over who gets what, and when, and how! Even if you have kids that get along great with one another, having an estate plan keeps them from having to worry that they’re not doing things the way you would have wanted them to – it gives them one less thing to worry about once you’re gone. 

That’s a great gift to give your children.

What is involved with estate planning?

Estate planning is the process of arranging and managing a person’s assets and affairs during their lifetime and after their death to ensure their wishes are carried out, minimize taxes, and avoid unnecessary legal complications. Here’s an overview of what’s involved:

Your estate plan is going to be different from mine, which is going to be different from my friend’s, which is going to be different from her brother’s. It’s going to vary from person to person, because everyone has a different situation, every family has different dynamics. Some parts of an estate plan can be:

• Assessing Your Estate: List all debts, such as mortgages, loans, and credit card balances.
• Will: Specifies how your assets will be distributed and appoints guardians for minors.
• Trusts: Legal arrangements to manage and distribute assets, often used to avoid probate and provide tax advantages.
• Power of Attorney (POA): Authorizes someone to make financial or legal decisions on your behalf if you become incapacitated.
• Advance Healthcare Directive (Living Will): Details your medical care preferences and designates someone to make healthcare decisions
• Tax Planning: Estate Taxes: Understand federal and state estate tax thresholds and strategies to reduce tax liabilities.

Whether you will need all of these depends on your circumstances, but it’s a good idea to get information about them all and see what’s right for you and your family.

Next month, I’ll talk more about estate planning, and especially about trusts, which can be a vital part of your plan.

Where can you find more information?

I would love to hold an Education Seminar to talk more about estate planning and how to get it done. Would you be interested? Click here to let me know if you’d like to come!