In some ways, “estate planning” may be a bit of a misnomer. It’s sometimes assumed that, in order to do estate planning, you need to have, well, an estate—financial assets of some significance. But actually, estate planning is just a matter of protecting the people you love. That’s something we all want to do, whether we happen to have a large estate or not.
Here’s a good way to think about your estate plan. Your estate plan is a set of instructions you provide on what to do after you die. That includes instructions about how to handle your money, of course, but also how to look after your kids and family. Again: It’s not just for the affluent.
The actual components of an estate plan are fairly standard-issue, though of course you and your attorney will customize them to reflect your needs and wishes. A will and trust are both recommended to ensure that guardianship of your kids goes where you want it to, as well as allocation of your assets, without anything getting tied up in probate court. Meanwhile, a living will and medical power of attorney provide instructions on what to do if you become incapacitated in some way.
A final point to consider about estate planning is that, even if your financial assets are modest, you can allocate them in such a way that they pay down your debts and/or funeral expenses—meaning you don’t leave financial burdens for your loved ones. This is a critical component of estate planning that is too often overlooked.
To learn more about why everyone needs an estate plan, contact the Singh Law Firm today.