As mentioned earlier, estate planning isn't just for the wealthy, but it's an important part of financial planning that anyone with assets or dependents should consider. For one thing, many people are simply not aware of how much they will leave behind when they die. When you think about estate planning, you might picture someone very rich and believe that this doesn't apply to you. Estate planning is one of several key areas of financial planning that you must address throughout your life.
While estate planning affects very wealthy people, it can also dramatically affect people with moderate incomes. One of the easiest first steps you can take now is to ensure that your beneficiary designations are up to date in their life insurance and retirement plans. Comprehensive life insurance helps protect your loved ones by providing you with tax-free money when you die, not just if you die during a specific period of time. You can rest easy knowing that your family is protected and take advantage of cash value and other livelihood benefits to plan ahead, no matter what life throws at you.
How we use your information Billing Notice for California Residents. Even those with minimal savings may have significant assets or particular requirements that require estate planning. However, many people aren't fully prepared; according to one estimate, only 46% of Americans have a will, an essential document in an estate plan. While this is the easiest option for most, control over the distribution of assets is somewhat limited, as your estate will likely have to go through the probate process after your death.
By creating powers of attorney, you can choose a family member or close friend to manage your wealth and healthcare options if you can't do it yourself. In that case, the court will divide your estate according to the state's intestate succession (not will) law, regardless of your wishes, and your family could face costly estate taxes. Estate planning ensures the care of your loved ones, provides assistance to your children and grandchildren, or supports a charity of your choice, among other benefits. Small estates with wills can go through a faster and less expensive process, but they still have to be approved by the probate court.
Finally, Trust & Will offers AARP members a new benefit to help them plan their wealth. An estate plan doesn't have to be complicated; in fact, it can be very simple, since all you need is a will that states who gets what after your death. Without proper planning, much of what you've spent your entire life building could be lost due to family disagreements, delays, legal and inheritance expenses, taxes, and other expenses. A study estimates that 60% of Americans may need the benefits of an estate plan while they are still living.
In a nutshell, estate planning is a framework for determining who receives their belongings, how much they receive, and when they receive it. It protects your estate from inheritance laws, which could seriously delay your family's ability to resolve their issues, and it sets instructions for the custody and care of children and pets.