Why Estate Planning is Important, At Any Income Level
As an estate attorney, I've seen firsthand how important it is for people to plan for the future. Unfortunately, many out there assume that estate planning, often called legacy planning, is only for the wealthy or for those who are nearing the end of their lives.
However, this could not be further from reality. Taking this step in life is important for everyone, regardless of income level or age. Here I will go over why creating a plan is crucial and the different aspects of legacy planning that everyone should consider.
Estate Planning Goes Beyond a Will
A will is just one aspect of your plan, and while it is important, it is not the only thing that needs to be considered. Legacy planning is about ensuring that your assets are distributed according to your wishes and that your loved ones are taken care of in the event of your death or incapacity.
This can involve the following:
Trusts to manage and distribute assets
Guardianship designation for minor children and pets
Healthcare directives to outline your wishes for medical treatment if you are unable to make decisions for yourself
Selecting beneficiaries for your retirement accounts and life insurance policies
Appoint a power of attorney to appoint someone to manage your finances if you become incapacitated
Let’s dig into more reasons you should begin your estate planning journey today.
1. You Want to Protect Your Children
In the event of your death, you want to ensure that your children are taken care of both financially and emotionally. This can involve setting up a trust for their benefit, designating a guardian to care for them, and appointing a trustee to manage their finances until they reach adulthood.
In the absence of an estate plan, the court will determine who looks after your children and how your property is distributed, which may not be in line with what is best for your family.
Dive in Deeper > Estate Planning When You Have Small Children
2. If You Don't Have Kids
Even if you don't have children, legacy planning is still important. State law will determine how your assets are distributed if you don't have your own plan in place, which may not match your desires. You may want to leave assets to other family members, friends, or charities.
Estate planning enables you to allocate your assets to specific individuals even if they’re outside of your family and determine how they will be distributed.
3. If You're a Pet Parent
If you have pets, estate planning is important to ensure that they are taken care of in the event of your death or incapacity. This can involve setting up a trust for their benefit and designating a caregiver to take care of them.
Without a plan, your pets may end up in a shelter or with someone who does not have their best interests in mind.
4. If You Live Online
Most of us spend much of our time online whether it is for work or play. Our digital footprint gets larger each day, which means we have digital assets to protect too. Think about your social media accounts, emails, cloud drives, and anything else you’ve done online.
But what happens to all that stuff when you're gone? Even if you give someone the right to manage these accounts, the websites and apps where your data is stored might have their own rules about what happens when you pass away. With more and more of our daily lives moving to the digital world, it's just as crucial to think about what we're leaving behind online as it is to consider our physical possessions.
Terms to get Familiar With > Top 7 Estate Planning Terms You Should Know
Start Planning for Tomorrow, Today
Estate planning is an important process that everyone should consider, regardless of their income level or age. If you have not yet created an estate plan, I recommend that you speak with an estate attorney to learn more about the options available to you.
Reach out to me today to schedule a consultation where I can help you create an estate plan that aligns with your wishes and provides for your loved ones in the event of your death or incapacity.
Don't wait until it's too late – start planning for the future today.