Estate planning allows you to lay out what happens with your assets after your death: how your property will be distributed and what you will provide for your loved ones. The process can also help set up a plan that designates the party responsible for providing financial and medical assistance for you following your death. Is estate planning really necessary? Without proper estate planning, your family may face substantial difficulties along the way. Consider these reasons why proper estate planning is critical to your family’s future.
1. Estate planning allows you to designate who can make decisions for you if you cannot make them for yourself.
Many people have a highly developed idea of what they would like to happen at the end of their lives. You may, for example, want to make use of every medical possibility to prolong your life for as long as possible; or you might prefer to avoid extensive measures past a certain point in your life. If something happens and you cannot make those decisions for yourself, you may want to designate a specific individual to make those decisions for you.
As part of your estate planning, you can set up a medical power of attorney that will allow the person you choose to make decisions for you. For most married people, their spouse will automatically get that right if they cannot make decisions on their own. You may, however, want to designate someone else to make those decisions–or you might want to designate which one of your children you want to be responsible for making those decisions. An advance healthcare directive can also help set out exactly what you intend to happen in certain medical situations, making your wishes clear.
Likewise, as you age, you may lose the ability to continue your own financial management. Many elderly individuals choose to designate a financial power of attorney: someone who can handle their finances, pay their bills, and help them stay financially stable even as they continue to age.
2. You may need to take a fresh look at your life insurance policies.
Your life insurance needs may change dramatically at various points throughout your life. If you have a spouse and a young family, for example, you may need to make sure that your life insurance will provide adequate support, especially if you have a spouse who will have to go back to work or find childcare for your children after your death. As you age, you may want to take a look at how your life insurance policy will help pay for your funeral and burial expenses.
Likewise, you may need to consider who will receive the benefits from your life insurance policy. For example, if you have been divorced, your former spouse may still be named the beneficiary on your life insurance policy. You may want to designate your children as beneficiaries as they age, or change the provisions when you no longer have minor children. At each stage of life, reexamining those benefits can help you choose the life insurance option that works best for you.
3. Estate planning can help you designate what you want to happen to your children if you pass away before they are of age.
As part of your estate planning, you will need to designate who will get custody of your minor children if you die. Most parents do not want to think about the possibility that their children will be left with no one to care for them, but you do not want the decision made by the courts, who do not know you or your children. Without a will, however, the court will be responsible for deciding what happens to your children, and your wishes may not be taken into account. As you handle estate planning, you can select who will receive custody of your minor children if you die. You can also help make provisions for those children financially, whether you choose to provide money to help their guardian raise them or you want to set aside money in trust for them when they reach adulthood. This provision can prove critical to your family’s future, especially if you pass away before your children reach adulthood.
4. Estate planning now can help reduce arguments after your death.
All too many families find themselves split apart by arguments surrounding the disbursement of a loved one’s possessions. Even the most loving family can wind up arguing over who deserves what or what cherished possessions they should get to take. Your will, however, can help reduce many of those arguments. Through your will, you can set out exactly what you intend to happen to your money and possessions after your death, which can help reduce squabbling.
5. Creating a living trust can make it easier for your loved ones to take possession of your assets after your death.
In many states, moving the deceased’s assets through probate can take a long time. A living trust may still require some time for transfer of assets, but it can streamline the process and make it easier for everyone involved. Your living trust can be altered as long as you live, whether you want to add assets, remove them, or change beneficiaries. It can still take time to settle a living trust. Your beneficiaries may need several months, and need to handle accounting fees, before they take full possession of your assets. The living trust, however, can streamline that process and help them avoid probate, which can prove time-consuming and frustrating.
Whether you have been putting off estate planning and recently recognized how important it is for your family’s future or you need to review your will, living trust, or medical directives to ensure that they meet your current needs, working closely with an attorney can make the process easier. Contact Stephenson, Chavarri & Dawson, L.L.C. at 504-523-6496 to schedule an appointment to start working on your estate planning needs today. It’s never too early to start preparing for your family’s future!