When’s the Right Time To Start Estate Planning?
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Originally Posted On: https://johnsonturner.com/blog/2023/april/whens-the-right-time-to-start-estate-planning/
Estate planning is essential to help get your finances in order. But when should you start estate planning? Here’s a quick guide to help you.
Did you know that 67% of people in the United States don’t have any kind of estate plan? Not having an estate plan can cause a lot of trouble for your immediate family. But when is the right time to start estate planning?
What does this type of financial planning entail? How can you make sure that you make the right decisions when you start planning? Keep reading and learn more about how it works with this estate planning guide.
What You Need to Know About Estate Planning
Many people work their whole lives trying to generate as much money and as many assets as possible. But the problem with that is that you can’t bring all that money with you when you die. This is why estate planning is so important.
Estate planning determines where all your money and assets should go when you die. Without a clear estate plan, your valuables might go to those who you don’t want to have them. But when you create an estate plan, you can specify who gets what.
If you don’t want individuals to receive your money when you die, you can also give those assets to an organization. An estate planner can help you decide where your assets should go. An estate plan gives clear instructions to your family regarding what should be done with your assets.
This reduces stress and confusion after you die. These instructions may also be followed if you become incapacitated, such as if you fall into a coma. This plan may also have instructions on how to care for you if you become disabled.
These instructions may involve the use of life insurance, health insurance, and so on. If you have a business, you can also determine what you want to happen to it after you die or become incapacitated. You can choose to dissolve the business after you die or transfer it to someone else.
This plan will also organize any matters of inheritance for your children.
If your children are minors when you die, you can specify who you want to be their guardian. If any of your family members have disabilities, you can use your estate to care for them after you’re gone.
You can also do this without disqualifying them from receiving financial care from the government. You can provide money from your estate for family members who might have money troubles. They might not be responsible with their money or they might have lost a lot of money in a divorce.
They may also be in a large amount of debt and are being pursued by creditors. You can fix these problems by providing these family members with money after you die. Creating an estate plan can also reduce taxes on what you’ve earned.
This is important because a significant chunk of your assets could be lost in taxes after you die. But if you plan your estate properly, you can avoid this problem. You can also avoid court costs and other unnecessary legal fees.
This is important because these fees and court visits will be left for your surviving relatives to deal with. You can make their lives much easier by planning all this in advance. This ensures that they will have to deal with the bare minimum.
When Should You Start Estate Planning
It is best to start estate planning as early as possible. Many people wait too long to start planning. Some may not start until they are old.
But this is risky because there is always a chance that you could die or become incapacitated before you can create a plan. This is why it is safer to start planning early. It doesn’t matter if you don’t have many assets to work with at first.
Estate planning is a continuous process. You can continue adjusting your plan over the years to better fit your desires. Many estate planners recommend that people create an estate plan once they turn 18.
18 is when you become a legal adult. You become responsible for their power of attorney, your finances, healthcare, and more. Most young people don’t think about estate plans.
This is because they might not have substantial finances yet. They are also not looking ahead to a time when they will die. This is normal, but it is still important for people to create an estate plan early.
Planning for the Future
A person might not have much at 18, but in 10 years, they might have hundreds of thousands of dollars worth of assets. If they still don’t have an estate plan at that point, things could get risky. Their assets might fall into the wrong hands if they die without an estate plan.
An estate plan becomes more important once you have a family. This is because your family will need to sort out your finances after you die. If you do not have children or a spouse, then your parents would deal with these finances.
Other responsibilities include sorting out your bank account and apartment or house. These also include valuable personal assets and life insurance. Creating an estate plan ensures that all of these responsibilities will be much more manageable after you die.
All About Estate Planning
It is best to start estate planning as soon as possible. This ensures that your finances are sorted out if you die or become incapacitated. An estate plan becomes more important as your finances grow and as you grow your family.
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