Many people assume that estate planning is something they can put off until their later years. But that kind of thinking is short-sighted and risky. Not only is there no guarantee that you will make it to your later years, but putting off your estate planning means putting off implementing measures that need to be in place now. That’s because certain decisions may require you to take ongoing action (such as paying insurance premiums) if you want to protect yourself, your estate, and those you love in the future.
Part of the misconception arises because many people think estate planning only comes into play when you pass away. But part of your estate plan should include making accommodations for aging, disability, serious sickness, unexpected accidents, and so on.
Life Events That Make Estate Planning Essential
Numerous people can benefit from estate planning, but there are some situations which make having an estate plan critical, such as:
- When you have a significant net worth
- When you get married
- When you have children
- When others, even parents or siblings, become dependent upon you for care or support
- When you are diagnosed with a serious condition that could be debilitating or life-threatening (e.g., ALS or cancer)
All of these situations or events are ones in which it will matter a great deal what happens to your estate if you are not able to manage it or are not around to manage it.
What Types of Provisions Go Into Estate Planning?
Estate planning is much more than just writing a will or setting up a trust. A comprehensive estate plan will mean drafting documents or putting into place provisions such as:
- An advance medical directive, which indicates to both medical professionals as well as your family or other loved ones what your wishes are for medical care in the event that you are rendered incapable of expressing those wishes yourself;
- Executing a will, which provides instructions on how you want all your property and assets distributed when you pass away;
- Executing a Durable Power of Attorney (DPOA), which allows for someone you trust to make medical and/or financial decisions on your behalf in the event you cannot make them yourself, due to mental unfitness or other incapacity;
- Setting up one or more trusts designed to protect your estate and those dependent upon your estate for their support and well-being, or to provide for some other entity or cause that is important to you;
- Life insurance, to provide proceeds to those you designate in the event of your death;
- Disability insurance, which provides support payments to you in the event you are disabled;
- Long-term care insurance, which pays for care, such as assisted living costs, should you lose the ability to care for yourself.
Not everyone needs every one of these documents or provisions in place, but seeking professional advice can help you determine where to begin. Good estate planning requires you to review and reassess your estate plan periodically to make sure your current plan reflects not only your current wishes, but your current situation. For example, if you have a new child and few assets, life insurance is very important to provide for your young family should something happen to you.
At eLegacy, our job is to explain to you the different aspects of estate planning, and to advise you on what steps are prudent for you to take in your particular situation. To find out more, contact the professionals at eLegacy and take the first steps toward protecting your future and the future of those you love.
Chances are, if you are even asking yourself whether you should put together an estate plan, the answer is already, “Yes.”