According to the National Association of Estate Planners & Councils (NAEPC), 56% of Americans do not have an estate plan. This leaves over half of families dealing with uncertainty and legal red tape in the event of a loved one’s death or illness. It’s not a fun thing to talk about, but planning ahead can mean the world to your loved ones. Estate planning is essential to personal finance management. Here is some information gathered from Fidelity.com.
It’s about more than a will.
You do certainly need a will, which will designate your assets to your beneficiaries after your death. If you have minor children or special needs adults in your care, it’s also vital to name a guardian for them. You also should have legal documents to cover other circumstances:
- A trust to ensure better spending by your beneficiaries
- A living will so that your loved ones know your wishes when you unable to make your own medical decisions
- A financial power of attorney if you are unable to manage your own finances.
- And more…
It takes a team of people.
Estate planning requires a lot of communication. You will need to designate an executor of your will and should clear this with the person you select before they are surprised with the information at your death. As needed, you will also need to carefully select a guardian for your children, a trustee to manage any trust, health proxies and/or powers of attorney, etc.
You should develop a team of experts to help with each aspect of estate planning. A lawyer will write your will and provide other legal documents and advice. An accountant will help you with tax planning. An insurance agent will help you make sure your beneficiaries are designated properly on any policies that you own. A financial planner will help you with overall planning and guidelines.
Taking the time to plan ahead now will ensure peace of mind for yourself and for your loved ones in the future.