As we get older, we hear terms such as assisted living and elder law planning. But we don’t always know what these terms mean. For instance, what is estate planning?
What is Estate Planning, and What is Included?
Nearly everyone in the United States and across the globe has an estate. Your estate consists of all things that are personally owned, including vehicles, bank accounts, furniture, investments, real estate, life insurance, and all personal possessions. The worth of your estate may be large or small, but there is always one thing in common. When you die, it cannot be taken with you. Think about it: all of your worldly possessions will remain behind when you pass on.
When somebody passes away, they usually wish to have some control over what happens to their possessions. They’ll want to have particular possessions passed on to the people and organizations they care about. To guarantee those wishes are kept, there will need to be instructions put into place that provide details as to who receives possessions, when they receive it, and what they will receive. Posthumously, an individual will wish to have instructions carried out with the least amount in headaches, taxes, and legal court costs.
Estate planning gives direction where and when your personal possessions will be dispersed.
Sound estate planning will include the following:
- Provide for loved ones with special needs and health issues
- A guardian for the handling of inheritance for younger children or minors
- Instructions for your care should you become disabled and not able to make decisions, or if skilled nursing is needed for memory loss and you are not able to make decisions on your own
- The passing of your purpose, such as hard work and family values
- Instructions for loved ones who are not good at handling money or possessions, including protection from divorce or creditors
Your estate plan should be reviewed consistently within certain time intervals, any time a significant life event happens and can be changed when you see fit.
Estate Planning and Financial Planning
Estate planning with financial planning is something that takes thought and research. Your estate planning process will begin with setting up a living trust or will. The method of planning your will can vary significantly from state to state. It is essential that if you are unsure about your financial well being in your mature age, that you get the help of a seasoned estate planning team.
It is never too early in your life to have a conversation about estate planning. The discussion typically initially takes place between spouses and/or adult children. If you possess a team of advisors, they will usually facilitate the conversations. Your team can consist of an estate planning attorney, accountant, and wealth advisor. You should also hire a professional designated to make sure whatever is decided upon will get carried through. It is essential to know that many discussions will take place, so changes may be made when needed.
Long Term Care Planning
Long term care planning is something that we should all take the time to have discussions about and put into place. Knowing that our possessions will go to the loved ones of choice and the organizations we believe in is a good feeling. Recognizing our loved ones will be taken care of if something happens to us allows us to be confident in the fact that if something happens, they will be cared for.
Long Term Planning Tools
Many estate planning tools are available for you to use. Using these types of devices will help to avoid estate planning mistakes that commonly take place because people are just not informed.
At the end of the day, estate planning is something that we all should do, and taking the time to have it done the right way will offer your family and estate peace of mind.