The Importance of Estate Planning

August 20, 2008 · Posted in Real Estate 

No one likes to think about it, but we all know that at some point, we will pass away. When we do, we will likely leave family behind, and because of that, it is extremely important to have some estate planning in place well before anyone is in a position to need it. Regardless of your net worth – whether it’s a few hundred dollars or a few million – you need an estate plan to make sure your loved ones are taken care of to the best of your ability.

Basic estate plans generally contain three different parts: a will, a designation of power of attorney, and a designation of medical power of attorney/living will. There are federal laws governing these things, as well as individual state laws depending on where you live, so you will likely want to consult an attorney to make sure your estate plan is compliant with all applicable legal guidelines.

To get started putting your estate plan together, you need to take stock of your assets. Your assets include any real estate, insurance plans, savings, investments and anything else of that nature. The will in your estate plan outlines what you want to have done with your assets after you die, so you must then consider whom you want to have inherit your assets. If it is more than one person that will inherit them, then you must consider how they should be divided among those people.

Wills are not simply for allocating your assets, though. If you have children, then your will is also the place to outline who should take care of your children after you pass away. Setting this out clearly well before it’s something that’s necessary will ensure your children are taken care of, which is one main reason that estate planning is so very important, regardless of how much your estate is worth monetarily. Dying intestate – without a will – can create conflict within your family and means you have less say over what you want done after you’re gone.

Dying isn’t a subject most of us care to think about, especially when we’re young, but having a basic estate plan in place is the responsible thing to do, particularly if you have children. The plan will ensure that your assets are divided in the way you want them to be, and that your family and loved ones are taken care of after you’re gone, which is something we all need whether we’re rich or poor.


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