The perception that the public often has of estate planning is that it is something that only the wealthy do. The reason for this is that people assume that if you don't have many assets, or own assets that carry a beneficiary designation (e.g. life insurance, investments etc.), that you do not have to go through the trouble of making out an estate plan. However, in reality, people from all income levels can benefit from the protections that estate planning offers.
To arrive at the many ways that you can benefit from an estate plan, it is important to ask yourself several questions. Since the answers of these common questions are affirmative for a significant number of people, many would benefit from estate planning.
Do you have young children?
If you have minor children, it is important to ensure that someone suitable is there to look after them, should something happen to you and your spouse. When you draft a will, you can address the question of guardianship in it. Failure to name a guardian in your will or estate plan can mean that the court will make this important decision after you die. Unfortunately, the decision made may not be one that you approve of.
Do you own (or have a stake) in a business?
If you own your own business or have a significant stake in someone else's, part of the lesser-known aspects of estate planning is business succession. Business succession is the process of planning the transition of your business (or business interest) should you pass on (or decide to retire). By putting together a business succession plan, you can ensure that your family business continues to run smoothly after your death with persons in charge of it that you approve of.
Do you have health problems?
If you have health problems or are likely to have health conditions that are hereditary later on in life, it is important to have someone who can make healthcare and other decisions on your behalf in case you become incapacitated or otherwise unable to do so yourself. Estate planning allows you to do this through a healthcare power of attorney and a living will. Although these documents give an agent of your choice significant powers to make decisions, your agent is bound to follow any specific instructions you put in these documents. You may also tailor these documents to limit the powers of your agent, if you choose.
In addition to your healthcare and treatment decisions, estate planning can also help ensure that your financial affairs are looked after in the event of an illness or incapacity. This is done by executing a durable power of attorney, which empowers someone of your choice to pay bills and taxes, sign checks and other financial activities on your behalf.
Take charge of your future
Let's face it; nobody wants to think about what will happen after they die. However, this is a poor excuse for avoiding estate planning and leaving these difficult decisions to grieving relatives. To get started on putting together an estate plan that is right for you, contact an experienced estate planning attorney.