By Anne Wenger
The term estate planning can mean many different things and range from matters such as simple wills and powers of attorney to a comprehensive structure that incorporates multiple trusts.
Regardless, everyone needs one, starting at age 18, the point of legal age.
Two big reasons exist as to why. First, you’ll want to articulate clear instructions as to what happens to you and your assets when you pass on. Leaving that to interpretation will most likely mean that your wishes won’t be followed. A more significant reason, though, is to ensure what happens to you while you’re still alive, but in some reduced capacity that leaves you unable to make decisions on your own as a result of advanced age, illness, accident or some other cause.
At its core, estate planning is a process that involves decisions about people and assets, regardless of net worth. It affords designated individuals the opportunity, in any number of circumstances, to make medical and financial decisions for you when necessary. Without it, decisions get made by the courts and turn into a long, expensive and emotional process.
At the very minimum, get a power of attorney in place to allow designated individuals to act on your behalf when you can’t. Other things can come into play later that will require folks to build upon their plan. Purchasing a home in California, for example, could trigger the need to establish a trust. The more advanced estate planning could come into play in a wide range of circumstances, such as having young children or children who are not yet prepared to manage the sum of money that they will inherit. This scenario is particularly true for cases where someone has specific medical needs or is disabled.
Starting at an early age can also make full estate plans less expensive over the long term and create the right foundation for expanding the plan later on.
Many folks believe developing and maintaining an estate plan only pertains to wealthy individuals who want to pass on money to their kids. Not so. Planning for circumstances during and after your life is just as important — if not more so — for the rest of us. What’s more, it often does not come with the high price tag many believe it to cost. Find a specialist that can walk you through all the options that are best for you. Do it sooner rather than later. You’ll be better off for it.
Anne Wenger is an attorney with McLaughlin Legal’s tax and estate planning division.