Estate planning is a term commonly associated with wealthy people who have a lot of personal assets. However, having a strategy of your own is an important investment regardless of your status.
Examining the benefits of an estate plan may give you the incentive to design one of your own. Carefully assessing your life, your goals for the future and the legacy you wish to impart can help you identify the foundation of your strategy.
Protect what matters
You might think that the money you earn and the assets you accumulate are yours no matter what happens. However, overlooking the need to make formal legal arrangements for your assets could mean they end up in the hands of the courts. The people you would want to inherit your assets might never see them.
If you have not yet started planning, you are not alone. According to CNBC, a staggering 67% of Americans do not have an estate plan. When you take the time to clarify some key aspects of your life, you can protect what matters most including your money and the people you care about.
Imagine reaching a point of incapacitation where you can no longer make decisions about your health or finances. You have no control over what people do with your money or the type of medical care you receive. An estate plan allows you to make important clarifications about your expectations.
You can name a financial power of attorney. You can also name a healthcare proxy. This allows you to provide detailed instructions to people you trust to make decisions on your behalf.
Keeping your plan in working order will require you to update it throughout your life. Your family will appreciate the time you took to create a formal plan, complete with instructions and guidance.