An estate plan does a lot more than distribute your assets among family members and organizations that share your values. It also protects you and your loved ones. That’s why everyone needs an estate plan, especially if you have minor children.
It’s amazing that some people still think they don’t need an estate plan. According to an article in Trust Advisor, “Why An Estate Plan Is Beneficial,” a small estate needs the protection that an estate plan can offer against unnecessary expenses and ensures that personal, financial and charitable goals will be fulfilled. There are four key reasons why everyone needs an estate plan:
- Stipulating Care for Yourself. This includes a healthcare proxy, power of attorney and living will that states how you want to be cared for, if you become incapacitated.
- Financial Security. Your will lets you specify the way in which you want your assets distributed and to whom. Without a will, state probate law will determine who receives your assets.
- Designating Guardians. If you have minor children, it’s critical to make written arrangements for their care. A will is the only legal way to do so in most states (e.g., California is an exception). You must designate a person that you want to be entrusted with the care of your children.
- Naming Beneficiaries. A key part of an estate plan includes making sure that beneficiary forms are completed—that means signed and dated—for everything from insurance policies to retirement accounts. Any asset that permits beneficiaries to be named, should be reviewed as part of the estate plan. Those accounts and beneficiary designations need to be reviewed any time there is a major event in your life, like marriage, divorce, welcoming a new child into the family, or at the death of a family member. Remember to also name a contingent beneficiary.
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