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Estate planning isn’t just for the wealthy. If you have family members or loved ones you’re close to, you should have an arrangement in place for when you pass on. Avoid complications by planning for the future today. Learn more about the importance of planning ahead with a will, trust, or estate plan.
Everyone should have a will or legal document that communicates your wishes after you pass. On the other hand, an estate plan goes much further. Not only does it deal with the distribution of assets and legacy wishes, but it may help you and your heirs pay substantially less in taxes, fees, and court costs.
If you don’t have a will when you pass away, the state will determine where your assets go, typically by lineage.
Here’s a list of items that are typically included in an estate plan:
In addition to these six documents and designations, a well-laid estate plan also should consider the purchase of insurance products such as long-term care insurance, a lifetime annuity to generate some level of income until death, and life insurance to pass money to beneficiaries without the need for probate.
In case you ever become mentally incapacitated and are no longer able to take care of your affairs, assigning a durable power of attorney for your finances ensures that someone will take control who has your best, and pre-directed, interests in mind. You’ll want to make sure it’s “durable,” as an ordinary power of attorney ends if you become mentally incapacitated.
Many people do this if they don’t have others to care for them, but it’s a good idea even if you do. Often, family members will need to jump through legal hoops before they can take over your affairs. With a durable power of attorney, that process will be more seamless.
Almost everyone should have a will, but not everyone needs a living or irrevocable trust. If you have property and assets to place in a trust and have minor children, having both estate-planning vehicles might make sense.2
You should avoid leaving the future division of your assets up to the state. While you may not think you have enough wealth to make an estate, a will, or a trust worthwhile, a moderately funded retirement account, some equity in a house, or a decent life insurance policy may make you worth more than you think. So, take the steps now to make sure everything is set properly for your loved ones and your legacy.
Success!
1 The Thurman Law Firm, https://thurmanlaw.com/wills-trusts-estate-planning/
2 https://www.investopedia.com/articles/personal-finance/051315/will-vs-trust-difference-between-two.asp, Jan 26, 2021
Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.