Many Americans are under the notion that estate planning is only for those who are in their golden years, but nothing could be further from the truth. Actively incorporating estate planning as part of every lifetime milestone can help ensure that your financial well-being grows with you. Of course, there are some aspects of estate planning that are best tackled in your golden years after you have maximized your assets, but life's earlier milestones deserve an equal amount of financial attention and planning.
When you buy a house
Buying a house is definitely one of life's huge milestones, and such an investment requires careful management. One of the things you will want to keep track of is your house's current valuation: outside valuation is necessary for this.
When you have children
Congratulations! However, your bouncing bundle of joy brings new responsibilities in all avenues of life, including your financial one. For instance, if you have gotten this far without life insurance as part of your lifestyle, now is the time to invest. This is particularly important if your current way of life (mortgage, etc.) requires both you and your spouse to hold employment. You will also need to name a guardian for your children, and backup guardians as well… you can never be too well-covered when it comes to your child's well-being.
Additionally, when you name guardians, make sure that you fully document any desires you have regarding the care of your children. Do not assume that your named guardians will either be alive at the time of your death or that they would raise your child in a similar manner that you would. You should also not assume a family law judge will rule according to your wishes, either.
As you age
There are many other aspects of life planning to take into account as well. For instance, you should absolutely look into a medical care directive as you age. This will legally spell out your wishes regarding care if you are not able to state your wishes yourself. This is often broken into two separate parts: one is a “living will,” which is you dictating your wishes directly. The other move is to give a particular individual medical power of attorney, which allows a third-party to make decisions on your behalf if you cannot.
If you have not looked into the power of living trusts by the time you reach retirement, it is time to do so. Living trusts come in two main flavors: revocable and irrevocable. A revocable living trust can help your heirs avoid probate. It can also get your assets into the hands of your beneficiaries much faster: potentially by a factor of years. Plus, they have the advantage of being, literally, revocable. This means that you can alter or even cancel the trust at any point before your death if you change your mind on anything.
On the other hand, an irrevocable living trust can help heirs avoid estate tax, maximizing their inheritances.
Estate planning is for all stages of life, no matter where you are. Contact us today at AmeriEstate to learn more about how to incorporate smart financial management into your life.