Estate planning puts you in charge of your legacy. The comprehensive process makes things easier for your loved ones if you ever become physically impaired to communicate your wishes. Your family won’t have to make difficult decisions on your behalf, like dividing your assets or managing your medical care.
The best time to plan your estate is when you’re still in good health and of sound mind as you ensure that important decisions are made as per your wishes. The estate planning process prevents future disagreements amongst your loved ones.
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What Is Estate Planning?
Estate planning means managing an individual’s finances in the event of their incapacitation or death. It involves managing and disposing of a person’s estate in preparation for their death or incapacity. It includes giving assets to heirs and settling debts and estate taxes and debts, as well as other personal matters like the guardianship of minor children and pets. Different professionals work together to create an estate plan, like a lawyer and a financial planner.
When Should You Start Estate Planning?
Most financial advisors highly recommend estate planning for all legal adults. The plan should be updated every three to five years to remain relevant. You can also start estate planning as soon as you acquire assets.
An Estate Plan guarantees that everyone will know what your wishes are in the event of your incapacitation or death. If you become incapacitated in the future and can’t make your wishes known, your estate plan will guide your loved ones. They won’t make wrong decisions or wonder what you would want.
Is Estate Planning Expensive?
Estate planning costs vary, and your specific process will determine how much you pay. Some estate planners may charge an hourly fee for their services, while others may charge a flat fee. Additional services rendered, like the preparation of a will, also determine the overall cost.
Creating an estate plan no longer costs thousands of dollars and isn’t only for the wealthy. You can get an affordable and legal estate plan that makes your wishes known when the time is right. Even if you don’t have many assets, consider having an estate plan.
Important Documents Needed for Estate Planning
You’ll need certain documents to begin the estate planning process. These include powers of attorney (POAs), living wills, bank account statements, full lists of your assets and liabilities, guardianship designations, and beneficiary designations. Here’s a breakdown of the documents you’ll need:
- Durable power of attorney
- Power of attorney
- Revocable living trust
- Last will and testament
- Medical power of attorney
- Advance healthcare directive
- Living will
- Trusts
- Beneficiary designations
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Purity is passionate about numbers and precision, which is what makes her a skilled financial consultant. Throughout her career, she has navigated complex financial landscapes and now spends time simplifying finance for individuals and businesses alike. From offering investment insights to retirement planning, her mission is to steer retirees toward financial prosperity and peace of mind.