The sooner you plan, the more prepared you’ll be for life’s unexpected twists and turns. You can start now, regardless of your net worth. You might say: “but I’m still paying off student and credit card loans!” Have no fear, your net worth is not the deciding factor in getting your estate organized. One thing to ask yourself is how prepared would your loved ones and family be if something happened to you tomorrow? Would they know what accounts you have? Where your financial information is? What your wishes are? These questions are vital when preparing an estate plan, and preparing for your passing in general. Making sure others have what they need to take care of your possessions is important.
Financially dependent individuals — such as your children — deserve to be afforded as much of your estate as possible. If you don’t have many assets, it may be even more important to plan to make sure what you do have makes it to the destination you think is most appropriate.
The objective is to have a plan in place so your loved ones can carry out your wishes — even if you are 35 years old and in perfect health. Have the what-if talk. Financial transfers tend to go much more smoothly when beneficiaries are aware of the plan beforehand. Discussing the distribution of your assets while you’re still living gives you the opportunity to explain what items you left to whom and why. This will clue your loved ones in on the rationale behind your decisions before you begin drafting your estate plan, preventing additional emotional turmoil upon your death. When everyone is on the same page, things go a lot smoother.
OK, now you see the usefulness of estate planning. What should you be looking for when you meet with an estate planning attorney — what questions should you be asking? You’ll probably need to consider a number of tools to help you, and a professional can give the details:
- Life insurance can replace lost earnings, which is especially useful for younger people who may not have enough funds in savings or retirement accounts in the event of an untimely death. And when you’re younger, you’re eligible for reduced rates.
- A will details how you would like your assets to be assigned. Especially with your children in mind, you can designate guardians or financial account trustees. Meeting with someone to coach you through this process is very important.
- Perhaps you need a trust to help you hand your wealth to your heirs. You need a professional to help you decide which kind of trust is best, and to make all of the correct choices so everything goes where it should.
- With a durable power of attorney or trustee, you’ll have someone with the power to manage the distribution of assets and take care of such practical things as selling your home and accessing your bank account
There are a several important things to do when forming an estate plan, but ensuring financial security for your dependent, establishing a health care directive, creating a will, and having a designated power of attorney, (or two), are all vital. If you were to suddenly become seriously injured or ill, having a living will and power of attorney that you know will go through with everything as you wish is necessary to make those important decisions when you can’t.
The earlier you start, the better! You can formulate a plan to conquer your debt, and make sure all of your assets are correctly planned out for your loved ones and family. Get started today, you won’t regret it.
