Consider These 11 Reasons To Start Estate Planning
When we’re younger, we tend to focus first on taking care of ourselves, whether it’s personally, professionally or financially. Life changes, and so do our priorities. Sometimes, it’s when we have children; at other times, our responsibilities grow to include our parents or other loved ones.
If you’re at a place in your life where your responsibilities and priorities extend beyond yourself, it’s time to put pen to paper and make your wishes and oral arrangements legally binding through various estate planning documents.
Your MoneyDo this week – consider these reasons to start estate planning for ourselves and our loved ones.
1. Avoid Court-supervised Guardianship Matters
Establish financial powers of attorney and health care powers of attorney, where you name someone to act on your behalf when you are no longer able or competent.
2. Help Avoid A Potential “I’m In Charge” Clash
Simplify matters for family and heirs after your death. Name the individual(s) responsible for managing your final affairs and documenting your plans for distribution of your assets.
3. They Couldn’t Read Your Mind When You Were Alive
Without planning, your loved ones may try to guess at what or who you thought was important to you. Even then, state statutes provide defaults for who will receive your assets at your death. If you desire to leave assets to specific individuals or charities that are not your ‘heirs at law’ you need to have an estate plan that outlines your wishes.
4. Who Will Care For Your Kids?
If you have minor children, your estate plan is where you name guardians to care for those children both physically and financially. You can also create trusts for their financial benefit that will last longer than their 18th birthday.
5. Consider (And Protect) Your Beneficiaries’ Current Circumstances
Sometimes, your loved ones have unique circumstances that require some forethought and planning as you write your estate plan. A trust is a thoughtful option if you have any beneficiaries receiving governmental benefits, since an inheritance could disqualify them from those benefits going forward.
Some beneficiaries may require added protection around the inheritance you leave them. Establishing trusts for their benefit can provide protection for those assets, so they cannot be used to satisfy creditors of the beneficiary, subject to division upon divorce, or provide further protection if the beneficiary has addiction concerns or is not financially savvy.
Stay tuned for reasons 6-11 next week in Part 2.