An estate plan is often thought of as something that only elderly people or people with a lot of money need. But a basic estate plan is important no matter what your net worth is, and especially important if you are:
- A parent of a minor child
- A homeowner
- A small business owner
- In a committed relationship but not married
- In receipt of an inheritance of property or other assets
Even a basic estate plan will ensure your wishes are adhered to after you die.
What ís in an Estate Plan?
An estate plan will generally include a will, a power of attorney, a living will or health care directive, and in some cases, a trust. It is important to work with an estate planning attorney licensed in your state, as there are state, as well as federal, laws that govern estates.
Everyone needs a will, which can be a relatively simple document that describes where you want your assets distributed when you die, and who you would want to take care of your children. If you die without a will, the process of closing and distributing the estate will be costly and time consuming for your heirs, and you will have no control over how your assets are distributed.
Trusts are often created at the same time as a will, and that ís because they are an excellent tool to allow you to put conditions on how and when your assets will be distributed. A trust can greatly speed the process of asset distribution, and reduce the cost. Trusts are not just for the rich ñ they are for anyone who has assets they want to distribute.
A Little Preparation Goes a Long Way
A good place to start is by thinking about all of your assets, including real estate, investments, retirement savings and life insurance policies, and then thinking about who you would want to inherit these assets. You should also consider who you would want to handle your finances and medical treatment decisions if you should become incapacitated. And of course, you will want to carefully consider who you would want to be the guardian to any minor children in the event of your death.
If there are charities that you support, including them in your estate planning is an excellent way to leave a gift that can have a lasting impact. Your estate planning advisor can help you structure this type of gift most effectively.
Finally, to save confusion and heartache later on, be clear and communicate with your heirs about your plans. A little communication goes a long way in avoiding arguments and rifts.
To find an estate planning attorney, most state bar web sites have listings of attorneys licensed to practice in that state. Referrals from friends and relatives are often the best way to ensure that you find an advisor who will help make your wishes come true, even after you’re gone.
