Being a functioning adult in modern society comes with a life chock full of responsibilities and to-do lists; grocery shopping, dental appointments, home repairs, housekeeping, etc. It’s no wonder why estate planning isn't near the top of to-do lists or hasn’t found its way to a list at all! Estate planning is also generally considered one of those dry topics that we would prefer not to think about or discuss.
But in reality, giving some thought to personal estate planning can actually decrease the amount of unnecessary stress we pile onto ourselves and those we love. By giving attention to your future and your children or your beneficiaries' future, you can live more in the present because you know no matter what, your finances are in order and in proper alignment with your desires. Keep reading for a brief overview of estate planning and why it is necessary makes getting to work on yours now easier than ever before.
A Last Will & Testament, According To Your Wishes
If you were to ask someone on the street what estate planning even is, most people would suggest it has something to do with a will. In will documents, you assign someone to an executor role so in the event of your unexpected death, your assets are dispersed in a manner that is in accordance with your wishes. The executor of your will and the state’s probate courts work together with clear direction laid out in your will to make sure the management of your estate goes according to plan.
The more detail provided in the outline of your will, the better. Asset distribution left unclear or in the fog can cause turmoil in a family whose time would be better served grieving instead of potentially fighting for assets. To avoid this best, it is ideal to work with an estate planning professional whose main priority is to cover each and every one of your bases.
Expected or unexpected, a death inevitably comes with immediate costs such as funerals, medical bills, etc. At the same time, probates can keep essential funds from being available or used for an unpredictable amount of time, even when a finalized will is in place. This can leave a grieving family responsible for covering the costs up front, which is the last place you want to leave your family after your passing.
However, it’s actually fairly simple to set up “transfer on death” beneficiaries for almost all of your financial accounts. This quick and easy set up will put the crucial funding in your families hands right away should they need to tap into your funds in order to cover costs that arise after your death.
Assigning a Medical Directive
Estate planning doesn’t only speak for you in the case of your death; some portion of these documents will actually outline your wishes in the event that you become incapacitated and are unable to make a sound decision or a set of decisions for yourself. A medical directive assigns a person you deem trustworthy to legally step into a decision making role for you when necessary. Not only does this give you a feeling of rest assurance, but it also makes things clear for your family when they understand who you would like to play what role in a crisis-given situation.
When A Living Trust Is Necessary
If you are a business owner, partner, or an individual with a high-net worth, outlining a living trust may actually be an extra step you’ll need to take. Why is a living trust necessary?
A living trust suits individuals whose situations are more complex such as those who have blended families, out-of-state property ownership, or business partnerships, among other examples. These grey areas can get very difficult to navigate in a probate court which is why a living trust can become significantly handy.
Due to their complexities, it is worth mentioning that these documents require ongoing maintenance and updating and are also more expensive to create. In some cases, they may even be overkill. However, in some instances where there are a lot of finances and assets to consider, a living trust can save not only difficult situations and conversations for your loved ones, but it can save years of legal battles and stress.
What You Should Avoid During Estate Planning
Your greatest financial enemy is avoidance. Estate planning can easily find it’s way to your future’s to-do list, or be put off until you feel like you're approaching an age where discussing it is more time sensitive and necessary. We understand that nobody is really ever in the mood to plan for their death.
That all being said, getting organized in this way and putting something in place is not only good for you, but it’s actually a highly appreciated favor that you are doing for your family. Documents outlining your very specific wants and needs will leave them in a less vulnerable position should they find themselves in the wake or your passing.
After you have outlined the general details of your estate, you can then spend as much time as you would like on the finer details. This time allows you to assess other aspects of your finances that were not obvious at first, or what changes occur throughout your life that were not previously mentioned in your initial estate planning.
If you find this process intimidating or difficult, work closely with a professional who specializes in crafting and organizing estate planning documents. Estate planning attorneys work in this corner of people’s lives on a daily basis and can prevent you from making common estate planning mistakes.
Estate planning does not have to be a dreadful or complicated process; tackling this critical task now allows you to enjoy your life tomorrow and for years to come. Check it off your to-do list today!