I have often said, “estate planning isn’t just for the retirees, it’s for you too!” We often think we will deal with the planning of splitting up out assets much later in life, but the truth is, there is no time like the present for estate planning. Even if you aren’t retiring tomorrow, this crucial puzzle piece can mean the difference between worry and peace of mind for those that depend on you.
Let’s look at what an estate plan is. It’s actually pretty simple. An estate plan is a set of documents that tell others what your wishes are when you can’t physically tell them. There are four main components:
This document divvies up your stuff the way you want. It will also contain the names of a couple of key people. The first is your executor or executrix. Their job is to ensure your wishes come true. If you want to leave your baseball card collection to your brother, they make sure he receives it. The next crucial person is a guardian or custodian. Unless you want the state to decide where your children go if you pass, then you will want to name someone to this position. If you are thinking, I don’t need to have a will at all, that couldn’t be further from the truth. Each state has one; it is called intestate. So if you aren’t too keen on the idea of the government deciding everything for you, then start your estate planning NOW!
This area of estate planning is twofold. One is your healthcare decisions. You will list your healthcare power of attorney (POA). The other important facet contained in this document is your finances. Should you become incapacitated, you will need someone to pay the bills. You will want to name a financial POA as well.
This gives them the medical directives to know how to provide care for you. It will instruct your POA on whether you want to be resuscitated or not should you be caught up in a near-death experience or if you are in your final days.
This is a MUST! If you don’t have life insurance, get some NOW! You don’t want to leave your family depending on you to fend for themselves. Provide for them even when you are no longer here to do so. If you and your spouse were to pass away, you could set up a trust to manage the money for your children. This will dictate how and when they get the money needed to provide for them.
Now that you know what you need, the next thing you need to know is who to give it to. Below is a list of the parties you will want to have a copy of your estate planning documents.
Estate planning is frustrating. But remember it’s not just for those that are retiring. It is for all of us—especially those of us that have children. If you have employees, or clients, or anyone that depends on you, then you need an estate plan. Life is hard, money is complicated, and estate planning is complex! Contact us if you are ready for a financially simple™ estate plan.