When it comes to planning for the future, the size of your estate and your age might seem like crucial factors.
However, the truth is that everyone, no matter their age or the size of their estate, should have an estate plan in place. Estate planning is about ensuring your wishes get respected and your loved ones get taken care of.
1. A will states your wishes clearly
A will is a fundamental component of an estate plan. It is a legal document that outlines how you want your assets distributed after your passing. Even if you do not consider yourself wealthy, a will helps ensure your belongings go to the people or causes you care about. This document can also designate a guardian for any minor children you may have.
2. Beneficiary designations keep assets out of probate
Assets like life insurance policies, retirement accounts and bank accounts can have designated beneficiaries. This means they can pass directly to these beneficiaries without going through probate, which is often a time-consuming and expensive process.
3. Advanced healthcare directives make your medical preferences known
Your estate plan is not just about finances. It is important to consider your medical preferences too. An advanced healthcare directive lets you outline your wishes for medical treatment if you become unable to communicate them. This can relieve your loved ones of the burden of making difficult decisions on your behalf.
Unfortunately, 2 out of 3 Americans do not have any estate planning documentation. If you fall into that category, an unexpected life-changing event may make a devastating situation even more chaotic and stressful.