Many people think they do not have enough assets to warrant a plan. But the truth is, it is not just about the size of your bank account. It is about ensuring your loved ones receive care, no matter what the future holds.
Why estate planning matters
It is common for people to avoid estate planning due to misconceptions, thinking it is only for older adults. In reality, anyone over 18 can benefit. Young adults, especially those with children, should have a plan.
Estate planning goes beyond distributing wealth after death. It encompasses various aspects of your life and future, including:
- Healthcare decisions
- Asset protection
- Guardianship for minor children
- Minimizing tax burdens
- Avoiding probate court
Dying without a will (intestate) means the state decides how to distribute your assets. The process in question might prove to be slow, expensive and possibly misaligned with your goals. By creating an estate plan, you maintain control over your legacy and ensure your loved ones will continue receiving their needs according to your desires.
Key components of an estate plan
A comprehensive estate plan typically includes:
- Will: Dictates how you desire your possessions to be allocated.
- Power of attorney: Designates someone to manage your finances if you become unable to do so.
- Advance directive: Specifies your healthcare preferences if you cannot communicate.
- Trust: Manages and distributes assets, potentially avoiding probate.
While online resources and DIY kits exist, crafting an effective estate plan requires legal experience. Laws vary by state and change frequently. A seasoned lawyer can ensure that your plan is thorough, legally robust and customized to meet your unique needs and objectives.