Have you ever thought about a future you’ll never get to experience? Where do you see your family? Are they protected? Or are they fighting endless court battles over who gets what?
Unlike what most people believe, estate planning is not a luxury practice. It’s an essential process for anyone who wishes to take care of their family after they’re gone and themselves when they can no longer communicate what’s best for them.
This article will tell you what estate planning is, why it’s important, and why you shouldn’t wait until it’s too late to draft one.
What Is Estate Planning?
If you have dependents who look up to you or if you run a business, you essentially steer the ship. Your decisions chart the path forward for the good of everyone. An estate plan ensures that this remains the case even when you’re no longer available.
Here are the different types of estate plans:
- Wills: This formal document names the beneficiaries of your assets after you die.
- Trusts: A trust allows you to transfer assets to someone else. This person is then bound by law (fiduciary duty) to manage your wealth in the best interests of your beneficiaries.
- Power of attorney: If you become incapacitated, a power of attorney lets you appoint someone known as an agent to handle your financial affairs. They can pay bills, manage investments, and file taxes on your behalf.
- Healthcare directives: This document lets you specify your medical treatment preferences if you can’t communicate them yourself.
These documents are extremely important in determining what happens to you, your assets, and your family in the future. Don’t just draft one and let it gather dust. Laws change. People change. Priorities change.
Work with an estate planning lawyer to periodically update your estate plan according to your specific situation. While no one knows what will happen in the future, a robust plan ensures everything goes according to your wishes.
Do You Need an Estate Plan?
Just because you’re not swimming in wealth doesn’t mean you shouldn’t think of an estate plan. If you have a family, run a business, or have people looking up to you, it’s a necessity.
Think about an estate plan if you:
- Have minor children: If you and your partner pass away, a will is the only way to decide who raises the kids. Without it, the court will decide, and their decision may not align with your wishes.
- Have real estate or run a business: Planning for the fate of your estate can facilitate business succession and continuity.
- Have significant assets or investments: If you have a lot of money and have specific wishes for where it will go after you pass away, an estate plan helps you make your wishes official and respected.
- Suffer from specific healthcare issues: Healthcare directives allow you to make your wishes about end-of-life care, treatment preferences, and life support, among other important official decisions.
“Estate planning isn’t about how much you have. It’s about making sure what you do have is protected and goes to the right people. Whether you own a home, have minor children, or just want to avoid probate, having a plan is important,” says Estate Planning and Business Law attorney Sasha Begum of Begum Pelaez-Prada, PLLC.
Conclusion
Before you begin working on your estate plan, you need to know the essential components and who it will protect. The best way to go about it is to list your preferences in a rough draft and then contact an experienced estate planning attorney to work out the details.
A professional estate lawyer has likely crafted estate plans for individuals just like you, ensuring they are well-versed in the dos and don’ts of the process.
They can create a plan that is enforceable and comprehensive, preventing nasty probate disputes down the road.
Also Read: Trust vs. Will: What’s the Best Fit for Your Estate Plan?
