Estate planning is not just for the wealthy. It is a good idea even if you have no appreciable assets, since in that case, you really can’t afford to make financial mistakes. And the earlier you begin making an estate plan, the better.
People under 40 many times ignore or put off estate planning. That’s a mistake. First, you never know when your time will be up. And second, planning and preparation will make the inevitable transition so much easier for your survivors, that it pays to have your finances and your wishes known and understood by all concerned. Planning it early offers you plenty of time for discussion and adjustments as conditions change over time.
Talk it over
Making a plan is important, but the affected people need to know about it before it is needed. Discuss the provisions so everyone is on the same page, and no ugly surprises will emerge after you are gone.
Components
The most important components of any estate plan are life insurance and a last will and testament. Your will should specify what your wishes are in indisputable terms, and your life insurance can provide a financial cushion, replacing any income you might have had at the time of death.
Other important components are a living will in case of incapacitation, and a designated power of attorney and estate trustee.
Professional help
Depending on your situation, you may need any or all of the following: A financial advisor, trust officer, accountant, and attorney. You probably have not done any of this before, and these people know the ropes and can help smooth out the bumps. They represent added financial cost up front, but they can save you time and money in the long run.
Review and Adjustment
Starting the process early helps for many reasons. One of the biggest is that it can afford a longer period for adjustments to the plan. In any event, your plan should be reviewed for any needed adjustments at least every ten years after its inception. Life situations change. Your estate plan should change as needed along with them.
For any questions on estate planning or other insurance issues, please check out the rest of our blog or give Phocus Companies a call. We have been entrusted to serve Arizonans in Phoenix and the surrounding area for over 25 years.
