When most people hear “estate plan” they have no idea what that means. I always hear “I don't own any property” or “I don't have children, why do I need an estate plan?” I tell them that an estate plan is not about today, but the future you are building for yourself and your family. Don't you want to accumulate wealth and retire comfortably? What about a family? Do you think you might have children someday? Do you have any disabled family members you may want, or have, to care for? What about your parents? Will they need your help?
So, what is an estate plan? First, a thorough estate plan involves planning for your financial future. You should talk to a financial adviser about your current financial and retirement situation and set a course for financial growth. Your financial adviser can discuss retirement plans, investment options and insurance to maximize your financial future. With this advice in hand and a course of action charted you can confidently prepare for your future as well as the future of your children and heirs.
Second, an estate plan consists of a set of written documents whereby you set forth your wishes regarding your assets should you be unable to handle your financial affairs and for the distribution of your assets upon your death. You and your attorney should discuss who will make financial decisions if you become incapacitated, who will make health care decisions for you if you cannot communicate those desires yourself, who will care for your minor children if you die and, finally, who will inherit your assets. Proper planning will give you peace of mind and ease the burden on your family. It can also save your family time and money and, in many cases, avoid lengthy court proceedings.
The most important thing to know is that estate planning is not one-size-fits-all. Everyone's wishes and needs are different. Also, your needs will change as you get older and your circumstances change. If you are young and just starting out, your estate plan may be mostly a financial plan, with minimal legal documents regarding assets. However, as you accumulate wealth, your legal estate plan may become more complicated. You may need to consider tax situations that may arise at your death. If you marry or have children, your estate plan will need to consider the future of your spouse and children. And, as you reach retirement age, your financial plan will change as will your decisions regarding your long term and health care needs.
So, what is an estate plan? It is a plan for your future and the future of your family. Do you need an estate plan? Absolutely. Proper planning will give you peace of mind and security for you and your loved ones.