You may think that because you don’t have major assets or because you are young and healthy, you don’t need an estate plan. However, an illness or injury can happen to anyone, and even if your assets are few, you and your loved ones can still benefit from an organized estate plan. Below are five reasons to consider creating one.
1. You can organize your financial life. Creating an estate plan involves taking stock of your assets and debts. You will get a solid sense of your financial situation.
- You may need to inventory many of your belongings and think about what you would like to happen to them.
- Even if your possession carry more sentimental than monetary worth, it is likely that you have some preference about who will get them, and an estate plan allows you to specify all of this.
- Creating an estate plan may also mean reviewing and possibly updating documents you may have forgotten about, such as beneficiary designations.
2. You can protect yourself in the event of disability. With an estate plan, you can appoint someone to manage your health care and your finances. This can be two different people or the same person.
- If you become incapacitated and cannot make medical decisions for yourself, who will do that on your behalf?
- What end-of-life care or types of life saving measures do you want to specify are put into place when you’re not capable of making those decisions?
- Who will make sure that your rent or mortgage and other bills are paid while you recover?
3. You can protect loved ones. Depending on your personal situation, this may take any number of forms.
- If you have minor children, you can name who you want to be their guardian.
- If you have a relative with special needs, you can set up a trust that distributes money to them while not interfering with their government benefits.
- If you have children from a previous relationship, you can ensure that they are beneficiaries along with the children from your current relationship.
- You can arrange to protect the assets that you pass on to your beneficiaries. This can shield the assets from creditors and former spouses.
4. You can minimize the strain on loved ones. In addition to dealing with your passing, if you do not leave an estate plan, your loved ones may have to cope with more paperwork and delays. The process of locating all your assets, including various accounts and passwords, is not only difficult and time-consuming but may create more stress and grief.
5. You can make sure your wishes are known. An estate plan reduces the likelihood of unanswerable questions about many important issues such as:
- Who should be in charge of managing your estate?
- What kind of end of life medical care you want.
- Who should receive the funds from your retirement account.
- Who should inherit which beloved items of sentimental value that you own.
- How you would like your social media accounts handled after your passing.
The likelihood of conflict among your loved ones may be reduced because you have made your wishes clear.
People often put off estate planning because they and their families do not like to think about a time when they will no longer be around. However, an estate plan ultimately may make your passing less difficult for them. An estate lawyer Sacramento trusts can help you put together an effective estate plan based on your needs and wishes.
Thanks to our friends and contributors from Yee Law Group for their insight into estate planning.