Who needs estate planning? Almost everyone. Here's why.
No matter your income level, estate planning is important for couples who are not married and for people with minor children, especially children with special needs. You may want to make particular instructions if you have heirs who are likely to fight among themselves. Estate planning with an attorney is also helpful if you can't decide how to divide your assets or want to make special provisions.
Nearly 50% of the population dies without a Will. I know it can feel like a scary process, but my clients are always relieved once a plan is in place. They have peace of mind that the well-being of their loved ones is secured.
Currently, only about 2% of the population has a federal estate tax issue. If you are in that category, you could save a lot by planning properly, and early enough.
What's in an estate plan
- Will. A Will takes effect upon your death. It's the basic planning document that says who should take care of your kids and who gets your assets.
- Power of Attorney. A POA is used while you are alive, during a time of incapacity. A proper POA authorizes a person of your choice to run your business or personal financial affairs.
- Medical Surrogate. Also called a medical power of attorney. Very important if you have special health care needs and desires.
- Living Will. A Living Will can spare your loved ones the agonizing emotional trauma of deciding whether to keep you on life support or let you go. You make the choice now, not them later.
- HIPAA Authorization. Gives your medical providers the legal ability to speak with your loved ones.
- Trust. A Trust lets you control your assets during life, during an incapacity, and after death.
Finally, simple planning is just as important as drafting legal documents. If you have an insurance policy, make sure your beneficiary designation is correct. Check with your bank and investment advisor to make sure you've named the right person for a Transfer on Death or Pay on Death designation.
As you can see, estate planning is for almost everyone, not just the super wealthy.