Estate Planning is one aspect covered when creating a financial plan. Estate planning consists of everything you own and how you want your belongings to be distributed and controlled after your death. An estate consists of your house, personal items, car, life insurance, investment options, checking and savings accounts and other real estate. Therefore, everyone has an estate. Estate planning is not something to add to your financial plan when you near death. It is something that should be part of your financial plan from the start and altered when needed because you cannot predict when you fall ill. Estate planning is not just for wealthy individuals. As a result, too many people do not plan. People put off estate planning because they think they do not have many assets, they are not old enough, they are too busy to create a plan, think they have plenty of time, they are confused on how to start a plan, and do not know who can help them, or they just do not want to think about an estate plan. Then, when something happens to them, their families are left with many unanswered questions and missing pieces. Therefore you should create a plan because estate planning allows you to control what belongings family members or charitable organizations receive after your death.
In order for estate planning to work, you need to write out instructions. These instructions should include the 3 W’s: Who, What, and When; who you do you want to receive your belongings, what do you want them to receive and when you do want them to receive them. These instructions are usually left in a will. Estate planning is not just for after your death but also a plan if you become disabled. You should include instructions for care if you become disabled before you die. If you have you children they should also be included in your plan. You should name a guardian and an inheritance manager for you children. You do not want special needs family members to be left without any support. In your estate plan, you should provide for special needs family members but without interfering with government benefits. You should include life insurance, disability insurance and long-term care insurance in your plan. Life insurance will help your family financially after your death. Disability insurance will replace your income if you cannot work due to an injury or illness. Long-term care will help pay for your care in case of a long-term injury or illness. Your estate plan should also include plans for your business if you are an owner. You should provide instructions for the transfer of your business when you retire, become disabled, or die. You should consult an accountant and lawyer if minimize taxes, legal fees and court fees.
As mention before, an estate plan is ongoing. Your plan should be reviewed and altered as your family and financial situations change. If you do not create an estate plan, then the courts will have to make decisions on your behalf instead of your family. Overall, an estate plan gives you a peace of mind because you know your family will be taken care of after your death.