Estate Planning: Why It’s Important
By Margo Cook
Many of us spend nearly all of our lives working, saving and accumulating, yet we may spend hardly any time planning what should happen to those hard-earned assets after we die. In fact, we probably spend more time deciding what color to paint the house than who our benefactors should be once we’re gone. Estate planning is important, and it’s not just for the rich. It’s for everybody. Estate planning is about you and your goals, concerns and passions. It’s about you and your loved ones too. All deserve your time and attention.
What is estate planning?
The purpose of estate planning is to determine what will happen to your important and valuable assets—bank accounts, retirement funds, proceeds from insurance policies, homes, belongings—after your death and, in some cases, even during your life.
Good estate planning can help you:
• Make your wishes known.
• Appoint trusted people to oversee your affairs after your death.
- Name people to speak for you—if you are incapacitated and can’t do so yourself while you’re alive.
• Minimize taxes.
• Support favorite charities, projects or people.
• Leave your estate organized and your wishes clear.
• Provide comfort and support for family and friends.
According to the American Association for Retired Persons (AARP), every adult—regardless of income—needs an estate plan that includes at least these four documents:
• A will to let you name who will care for any minor children, manage your estate and get your belongings after you die.
• A durable power of attorney to name trusted people to make financial or legal decisions for you while you’re alive if you can’t make them yourself.
• Advance directives to indicate the types of care you do and don’t want if you become sick or terminally ill. You can also appoint someone you trust to make medical decisions for you if you are unable to do so.
• A letter of instructions, which can include any important information loved ones will need after your death, such as burial wishes or the location of bank accounts. This letter can also detail the emotional inheritances you wish to leave your loved ones, such as memories, lessons, and family traditions.
Depending on your family and financial circumstances, you may need other documents too, such as those creating a trust. Although you can prepare estate documents yourself, the help and advice of an attorney experienced in estate planning is invaluable. In many cases, it’s a relatively small fee to have the documents prepared by an attorney. And, as AARP notes, once estate planning is done, it’s done, except for periodic updates if circumstances or laws change.
Estate planning is about you and your goals, concerns and passions. It’s about your loved ones too. All deserve your time and attention.