As little as any of us wants to think about death, no one lives forever. However, most people put off estate planning for far too long. Approximately 60% of Americans haven’t even created a will. The temptation to put off the difficult work till later, rather than think about such a grim topic, leaves many families unprepared.
Some of us tell ourselves we’ll never have to deal with the mess of our own tangled estate after we’re gone. Our families, however, will. There is nothing like the peace of mind that comes from knowing your loved ones will be free of worry, even when you’re no longer there to take care of them.
What is estate planning? How do you go about doing it? Why is it so important? We’ll show you how you can get a will and other pertinent documents easily taken care of with the help of a financial advisor.
What Is Estate Planning?
Estate is a word that brings to mind the mansions of the wealthy, but really, it means your property, large or small. If you have a bank account, a home, or belongings, you have an estate.
Without a will or a living trust, there’s no way to be sure who will inherit your property. Depending on local laws, a court may assign inheritance to someone you didn’t have in mind. Your loved ones may waste years fighting each other in court, racking up not only fees but bad blood.
In your will, you can decide whether to leave the entire estate to one person, like your spouse or child, or divide it between a number of heirs. This is your chance to look after your children from a previous marriage or friends who matter to you as much as family. You can give your home to one of your children who has a family or your stocks to one who will handle them responsibly.
The next step in estate planning is determining what will happen to your dependents. If you have minor children, it’s vital to designate a guardian you trust to see them through to adulthood. Think of who you trust to raise your children with the care and values you do. You’ll want to designate funds, if you have them, for your child’s care or education. It’s important to discuss your plans with this person and have their agreement as well.
There’s much more that can go into estate planning. If you own a business, you’ll want documentation of who is to succeed you in management. If your family relies on your income, life insurance is essential. You may want a living will, which describes your medical wishes if you become incapacitated and designates someone to make decisions for you. You can even describe your burial wishes.
Good estate planning will leave all these decisions settled and documented, ideally in a way that spares your loved ones as much tax burden as possible.
Why Use a Financial Advisor?
Inheritance and tax law are both thorny fields, so a financial advisor is essential for helping you navigate the briar patch. They can help you understand the laws in your area, select a good insurance plan, and minimize inheritance taxes.
Beyond this, they may have helpful advice on how best to divide your assets and responsibilities among your loved ones. Once you’ve described both your financial picture and the state of your family, they can suggest a fair division of your property and the documentation you need to make sure your wishes are followed. They don’t just know the law, they have experience with all kinds of estates, large and small, and the drama that can ensue without good planning.
Ready for Some Solid Estate Planning Advice?
One thing is clear: if you don’t have a plan, you have no control over what happens once you’re gone. And, as there’s no way of knowing how long you can afford to put it off, the best choice is to start planning now, while you’re hopefully a long way from needing it.
Whether your estate is large or small, it’s never too soon to get the paperwork settled. Contact us here at Advice Chaser to be matched with the perfect financial planner for your situation today!