Estate Planning Essentials: When Should I Start?

People often disregard estate planning as something for the wealthy, the old, and the financially successful. But the truth is that estate planning is for everyone, and it’s never too early to start. In fact, it's an important element of strategic retirement planning.

If you have any investments, valuable items, dependents, bank accounts, or insurance policies, you need to start thinking about estate planning. As is the nature of planning, it’s most effective when it begins immediately.

After all, you just never know what the future holds. When you have your estate in order, you can focus on the present and stop worrying about the future.

Below we outline the essential steps to starting your estate planning process.

 

Create a Will

Even if you don’t own extensive property or have children who depend on you, creating a will is recommended. An up-to-date will makes everything much easier after your death. It will keep your estate out of the court system and help your family to know how to proceed. 

What should you include in your will? Start with the following:

• A list of your assets
• Gifts you want to distribute
• People you want to include
• A list of executors for distributing your estate

It’s helpful to gather a list of your assets. Don’t forget to include your physical assets, like real estate, cars, jewellery, and art, as well as financial assets like any bank accounts, stock shares, and investment accounts. Most people also like to include heirlooms and sentimental possessions in their wills. 

It’s a good idea to make a list of your liabilities, such as outstanding car loans, mortgages, and personal debt. You’ll have to make decisions about whether to distribute items with liabilities. For example, do you want to leave your home to a family member, even if it means they have to assume the mortgage?

Your executor is the person who will be responsible for looking after the distribution of your assets. You can ask one person to do this, or you can spread the responsibility over several people. The executor should be over the age of 18, and he or she should be a trustworthy person who can make decisions on your behalf. It’s perfectly acceptable to make your executor one of your beneficiaries as well. In fact, executors who are beneficiaries have an added incentive to make sure that your estate is well cared for.

 

Acquire a Power of Attorney

While you’re creating your will and making decisions about your assets, liabilities, and executors, take some time to appoint a general power of attorney as well. This document will help your loved ones if they ever have to make decisions requiring your medical treatment because you’re no longer able to make the decisions yourself. For example, if you’re unconscious after an auto accident, your loved ones will likely want some direction from you as they’re talking to physicians. A power of attorney provides this direction should it be needed.

 

Establish a Trust

If you have substantial assets, you may want to use a trust, which allows you to have more control over how your assets are distributed. This is especially true if you have young children. A trust allows you to have your assets managed by someone else until your children are old enough to inherit your assets.

 

Getting Started With Estate Planning

Do you feel overwhelmed when you think about estate planning? There’s no need to feel overwhelmed. Our Wealth Management experts can help you to work through your estate planning with ease so you can have the peace of mind that comes from thorough planning and preparation. Contact us at Altus Financial to learn more about estate planning and to get started today.