You don’t have to be wealthy to make sure your financial affairs are in order nor is estate planning just about minimizing taxes. Estate planning insures that your loved ones are taken care of and your intentions are carried out.
Not Having a Will: A will not only spells out how your assets will be distributed, but also spells out who will take care of your children should you pass away. If you don’t choose a guardian, then one will be appointed for you by the court. Each state has different laws regarding who inherits your assets when you pass away, and it probably will not be who you would have chosen.
Choose Your Executor Wisely: The executor of your estate is supposed to handle the distribution of your assets and carry out your last wishes per your will after you pass away. The individual you choose should not have financial issues, such as gambling problems, debt problems, or tax problems. The executor does not have to be financially savvy, but should be trustworthy and knows when to seek legal, tax, and financial advice from qualified professionals.
Assets that Pass Outside of Your Will: Some assets are distributed through your will, but a surprising number of assets are passed outside of your will. These can include life insurance, IRA’s and retirement accounts, transfer on death accounts, trusts, and assets owned as joint tenants, such as real estate. This is why it is important to make sure that your beneficiary selections are up to date and you have property titled correctly.
Other issues to consider are living wills, healthcare proxies, and appointing a power of attorney. Estate planning is a sensitive subject, but should not be delayed until it is too late.