No matter your net worth, it’s important to have an estate plan in place to prepare for life’s uncertainties.
In the most simplistic terms, an estate plan is a set of instructions that ensures your home and other assets are distributed according to your wishes after you’re gone. An estate plan will name guardians for children, an executor for the estate, and formalize any specific instructions you might have with regard to the transfer of assets. Having these instructions formalized in a written agreement has the benefit not only of avoiding confusion and conflict among your heirs, but also of minimizing delays and expenses in settling the estate.
Perhaps of equal importance, a well-executed estate plan will also provide instructions for unforeseen events during your lifetime. Specifically, the plan may allow for medical or financial decisions to be on your behalf if you become incapacitated, or it may give direction about life-support measures you may or may not want implemented.
Estate planning conversations can be sobering, but they are an essential part of a well-executed financial plan. Too often, families who have done very well financially, fail to plan, and unfortunately, conflicts, costs, and complications that arise from the lack of a detailed estate plan often destroy what should have been a lasting legacy.