What is Estate Planning?
I was having dinner with some family friends over the weekend and was asked what exactly estate planning is and why someone should do it.
Most people have insurance – health insurance, long term care insurance, car insurance, homeowners insurance, life insurance, etc. People have insurance and pay for that insurance, hoping that they never have to actually use it. And, if all goes exceptionally well in their lives and they never get sick (I have), crash a car (also have), or have something bad happen to their home (that too), the only one of those which they’ll definitely use is life insurance (assuming its permanent) because, eventually, everyone dies. So that’s the first – and somewhat morbid reason – to have an estate plan. When you die, you want to be able to control what happens to your things and, especially if you have minor children, your family.
But there is much more to it than that.
Estate planning is doing the work of ensuring that everything you own and care about would be handled the way that you wish if you weren’t able to do it yourself. We protect those things to the greatest possible extent.
Its about answering all of these (and other) questions:
- Who will handle my finances if I become incapacitated?
- Who will raise my kids if I’m unable to do so?
- How do I protect my assets if I get sued?
- When should my kids inherit my assets / receive life insurance proceeds should something happen to me
- Who will manage assets for my children until they are responsible enough to do it themselves?
- How do I minimize estate taxes, court costs, and fees?
- Who will make medical decisions for me if I cant make them for myself?
- How do I ensure I qualify for government benefits?
- How will I transfer my business?
So, that’s the answer. Estate Planning is about answering all of those questions BEFORE you’re in a position where you can’t.
If you need help thinking about the answers to those questions and putting those plans and documents in place, we’re happy to help!