If you don’t know what estate planning is, you may think it doesn’t apply to you unless you own a large home and expensive furniture and antiques. However, all of us have at least a modest estate, as the term means everything you own; even if you don’t own a home, it includes your car, investments and bank accounts, furniture, and anything else. Estate planning is ensuring that your assets and belongings go to the people you want them to go to, after your death.
Although laws can vary by state, if you don’t appoint who should receive your assets after you die, everything distributes according to the rules in your state. In many cases it can mean that your financial assets and possessions go to someone you don’t want them to go to, or children that you have no contact with inherit your home. And it can also mean months or years of legal arguing and paperwork, as the state tries to figure out who gets what. Estate planning ahead of time can avoid all of this, and make sure that your wishes are clear and respected. Planning also means that your surviving loved ones won’t have to put up with unwanted court costs, legal fees, and taxes.
Estate planning should occur as soon as you can; it isn’t something that should wait until you are retired or sick. A simple first step is to make a will detailing how you want your assets divided after your death. The probate process in your state will occur, although a properly drawn up will can make the process a lot easier on everyone. Keep in mind that such financial assets as a 401K plan and life insurance will automatically transfer to the person chosen by you. Once you have drawn up a will, make sure your family knows where it is, and that you name a responsible person as executor, to oversee and handle your will and your final instructions.
Although it is possible to draw up a will yourself, it’s recommended to contact a good estate lawyer to help with the process. An estate lawyer makes a point of knowing the laws in your state, how they might affect you after your death and what you should be doing now to plan for that.