According to Forbes Magazine, a majority of adults in the United States have not made any sort of estate plan. You may think that estate planning is only for the elderly or people who are very rich. The truth is that anyone can benefit from an estate plan, and planning early can benefit you in several significant ways.
Early estate planning allows you to prepare your family for what may happen and communicate your wishes to them. Because you never know what might happen to you and when, early estate planning means that you are ready for the unexpected. Here are some specific things that you can accomplish with an estate plan.
1. Provide for your family’s care
It is especially important to have an estate plan in place if you have minor children. An estate plan allows you to provide for them not only financially but also to name a guardian who takes on parental responsibilities and provides day-to-day care. If you die without an estate plan, these decisions will fall to the court.
2. Plan for your own needs
A comprehensive estate plan also includes documents such as powers of attorney and advance directives that express your wishes in the event that you become incapacitated. An advance directive describes the kind of health care that you do (or do not) want to receive in this event. Powers of attorney grant decision-making powers in matters of health care and/or finance to a trusted agent.
3. Establish your legacy
The wealth that you accumulate in life can fund good works after your death. Estate planning can help you formulate philanthropic goals that will not only support causes that you believe in but also help people remember you in a positive way after you are gone.
4. Preserve family values
If your children are grown, you may not have to provide for their maintenance after your death the way you would for minor children. Instead, you may see them as stewards of the family wealth. By talking about your estate plan with them, you can explain what you expect of them in terms of stewardship and family relationships when they eventually inherit from you.