Some young adults think that they don’t need to handle estate planning matters right away. While it might be true that these individuals have a lot of time left on the Earth, you just can’t predict what might happen. Estate planning is best done as early as possible.
Surprisingly, there are even some older adults who haven’t taken the time to get an estate plan together. No matter what stage of life you are in, you should think carefully about your estate plan and then get it all taken care of so that your loved ones won’t have to guess about your wishes if something happens to you.
Your will and trusts
You need to tell your loved ones how to divvy up your assets when you are gone. Your will and trusts can do this. The will is a tool that lets you dictate who gets items that aren’t included in trusts. Trusts are useful to divvy up assets that you want to place conditions on or when there are special circumstances you need to consider.
For example, you can set up a trust that provides a specific schedule for distribution. You could have it set up to where a disbursement is made when a person decides to go to college, hits a certain age, gets married or meets other requirements. There are many types of trusts, so evaluate them to determine which ones meet your specific needs.
Some trusts are useful for ensuring that a person won’t lose out on needs-based benefits. These special needs trusts are useful if you have a child with special needs who will require care even after you are gone.
If you have minor children who are still living at home, you need to leave instructions for who will care for them if you die. Having guardianship documents in your estate plan can do just this. You should make a plan for each child. Make sure that the guardian is someone who is able and willing to care for the minor children. Without a guardianship designation, your children might end up having to go into foster care. You won’t need a guardianship designation in your estate plan once your children turn 18 unless you have a child with special needs.
Your end-of-life plans are another important component of the estate plan. This can help others to know what types of medical care you want and what types you decline. You should give a person power to make medical decisions for you if you can’t make them on your own. You should also designate someone who can make financial decisions for you.