Although creating a clear estate plan may seem morbid to some people, the alternative can be financially devastating. As many corporations and government plans are relaxing their focus on pension plans, it has become even more important for individuals to plan for a secure financial future. While some individuals may fly by the seat of their pants, many financial advisors recommend taking a more proactive approach.
Previous estate planning goals revolved around avoiding getting slapped with high levels of taxation, but current attempts now include elder law plans. As we face longer life-spans, we need to make sure our retirement funds last. Efforts should include making the most of an IRA, providing for essential needs, long-range health care expenses and ensuring our beneficiaries will inherit the financial considerations we want them to enjoy.
Many experts claim that estate planning might seem to represent a loss of financial control, when the end result is exactly the opposite. A clear plan is a way to make sure our assets are distributed according to our wishes. It also reassures clients that the chances to have to rely on family members later on are less likely. Another advantage is it permits us to identify a list of assets, so we are clear about what we are leaving behind. It is never too early to begin to make a checklist of our assets so we don’t forget about investments, real estate, business endeavors, insurance policies, annuities or retirement funds.
Keeping an updated list allows us to be mindful of liquidity and ownership, along with contact information for our heirs. Regardless of income, all individuals should include power of attorney and proxy for health care in case we become unable to make cogent decisions. We also should name a guardian for our minor children. The checklist we make should be revisited and adjusted regularly, especially after important life events, such as marriage, death or divorce.
In being responsible with our estate planning, our beneficiaries and loved ones will receive their proper inheritance and avoid running the risk of competing with a long-gone ex-spouse. In the long run, following these simple recommendations will benefit present and future generations.
Source:foxbusiness.com, “4 Tips to Begin the Estate-Planning Process” Kathryn Buschman Vasel, Nov. 22, 2013