It’s not something any of us really like to think about but we won’t be around forever. Indeed, we might have decades left to enjoy life but sooner or later we will have to think about what we’re going to be leaving behind to those closest to us.
That is why financial estate planning for your loved ones is such a vital thing to consider for anyone of a certain age that wants to ensure they are leaving behind something of value to the people they love.
This can also be something of a gift for those that you leave behind, but how should you go about crafting your estate plan?
What is estate planning?
Leaving a legacy and passing down your wealth is not something that only the rich and famous need to worry about. An estate plan is more than just a will (though a will is part of it), it’s a complete plan for your complete assets and it doesn’t just include caveats for if you are to pass on early either. You would be surprised how many people don’t have an estate plan in place and if you think it’s about time you got yours sorted, the best place to start is looking at exactly what it should entail.
What needs to be a part of it?
Advanced directives – If you should become unable to consent to medical care for any reason then you want to be 100% clear on what you want the next step to be. Would you prefer to prolong your life under dire circumstances or allow nature to take its course? This is not a decision that should be left down to your family because it’s simply not a fair decision to ask them to make. So, while it might be hard to think about, it’s a question you need to ask yourself.
Long-term care plans – Nursing and care homes do not come cheap in this day and age. So, rather than having your entire estate go towards keeping you safe in your final years and leaving your family with nothing to inherit, why not plan ahead to cover nursing care costs? Estate planning experts should be able to help you put these pans in place.
Will – Your final will and testament specify not only who inherits your assets but who might act as a guardian for your children (or pets) and how you want to be buried. In some instances, you’ll also need to appoint someone to look after an inheritance before the recipient comes of age. Note that you might also need to name beneficiaries of other investments, such as pension plans etc.
Life insurance – Purchasing life insurance is perhaps the best thing you can do for your family and should be a no-brainer. This isn’t a gamble you’re talking about here; it’s ensuring the security and happiness of your loved ones.
The Last Word
By incorporating these elements, you can create a viable estate plan that affords your loved ones the gift of financial security in the future.
This is increasingly important given the current economic climate, which is characterised by stagnant real wages and rising living costs.