If someone mentions estate planning, what springs to mind? Perhaps how to leave your assets to your family while paying as little in taxes as possible? That is a crucial aspect of any estate plan, but there is much more to it than that.
Let’s say you have a spouse and two young children. What should a comprehensive estate plan cover in your situation?
You cannot predict the future, but an estate plan can prepare you for it
Here are some ways an estate plan can help:
- Guardianship: If you die while your children are still minors, your spouse will look after them. Yet what if you both die at the same time? Who will raise your children? Who will control any money you leave them? Remember, kids cannot inherit until they turn 18 years of age.
- Continuity: You feel healthy now, yet it may not always be that way. If you suffered a nasty accident that left you comatose, would your spouse have immediate access to all your accounts to pay bills? Ensure you have powers of attorney in place.
- Your old age: While billionaires continue working on ways to preserve youth, the chances are high that your health will deteriorate with age. Healthcare is not cheap, and while you need to put money aside, you need to do it correctly. Otherwise, the care providers could burn through your savings, leaving nothing for your family.
Estate planning is complex, and it can seem confusing. The rules that affect it can also change. Yet putting it off for another day will put you and your family at risk. Creating an estate plan might not be a fun task, but it is one you need to tackle as soon as possible.