Estate Planning: Prepare for Your Family’s Future Today
You may think that only the uber-wealthy need to worry about estate planning. These days, that’s not the case. If you have any financial responsibilities -- such as a house or children – you need to take steps to plan for their future and protect your estate, and those who depend on you for support and security.
As you think about how you would like your finances to be handled, here are three key steps to consider:
1. Life Insurance
The cornerstone of any estate plan is Life Insurance. In the event of your death, it can help provide your family with the money needed to pay estate taxes, the mortgage and everyday bills.
You may also consider Life Insurance for your spouse. Even if he or she doesn’t work outside the home, consider how much it would cost to hire someone to handle their household responsibilities that you don’t pay for now. Some experts estimate that paying professionals for services like childcare, transportation, cleaning, laundry, food-shopping and meal-preparation could cost as much as $40,000 a year.
In addition, some Life Insurance policies offer an accelerated death benefit option that allows you to receive money from your policy if you become terminally ill.
2. Wills
A Will is a legal document that assures your estate is handled in the manner you choose. In addition to stating your wishes regarding the distribution of your money and possessions, a will may also be used to appoint a guardian for your children and name an executor after your death. Have a will drawn up by an attorney – official documentation assures your wishes will be carried out properly.
Keep in mind, a basic Will does not make provisions for your care if illness or injury causes you to become incapacitated or incompetent. That’s why it’s also important to create a Living Will. This document conveys your wishes regarding your personal health if you should no longer be able to make decisions yourself. It’s important to cover all of your bases while you’re able. Leaving difficult decisions for your family to handle can cause unnecessary stress during an already a difficult time. Proper planning can prevent undue heartache for your loved ones.
3. Trusts
You may find that establishing a Trust under the provisions of your Will may work best in your situation. You can establish a trust which can be accessed during your lifetime. The assets can be used for your children’s education, to care for a sick or elderly relative and more.
Don’t wait. Put your financial affairs in order today with an Estate Plan. And most importantly, don’t forget to review and update your plan as your needs and lifestyle change.
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