by MATT CASADONA
Contrary to popular opinion, estate planning is not only for the wealthy one percent. In actuality, everyone can benefit from having a proper and well-thought-out estate plan. Even if you’ve only apartment hopped your whole life, you and every other master renter out there still need an estate plan. Here we discuss the sentimental and fiscal benefits of estate planning and why it’s a necessary step for everyone, no matter your situation.
What Is An Estate?
You might be wondering what an estate actually is. The term gets misconstrued often, so it’s really not a bad question. To explain, an estate does not necessarily mean mansions, castles, or vacation homes in Italy. An estate just refers to the assets or property that belong to a person. Your vehicle, your family jewelry, and your cat can all be considered assets and part of your overall estate.
Outside of obvious things like houses and vehicles, you ultimately get to decide if something is considered an asset. Knowing that you have this authority should reassure you that you are more than deserving of carrying out estate planning and doing so the right way. The biggest factor that qualifies you for estate planning is your desire to transfer your cherished belongings over to your loved ones when you die. Assuming you have something of value (or deem something not of value to be value) that you want to give to your family and friends once you pass, then you are the perfect candidate for estate planning. If you feel an overwhelming inclination to give your Grateful Dead T-shirt collection to your brother, Steve, you qualify. It’s for everyone.
Creating An Estate Plan Effectively
Once you decide that you’re interested in estate planning, it’s important that you come up with an estate plan that suits your needs. Estate plans are the living documents that provide you with the protection you need for your property, assets, donations, and other important items, and how you want it all distributed once you pass away. The first formal document in every estate plan is the will, a document that identifies the specific people and the assets they should receive once you pass. Wills also list power of attorney and additional information related to your passing and how you want things handled. You can think of your will as your order of instructions to those involved after you pass.
Cover Every Single Detail
To get started with estate planning, we recommend that you speak with a financial advisor who can get you involved with estate planners local to you with the qualified experience you can trust. It is important to remember that estate planning is still a business despite the sensitivity of the topic. Don’t settle for the first estate planner you find. Remember to shop around and look for those who can offer you the best value for your time and money. When you meet with your financial advisor, you should go over the budgeting aspects that pertain to your will and the wishes you have for your funeral and distribution of your estate. These ideas will then be further considered by the estate planner you end up hiring for additional speculation and decision-making. Together, the two of you will determine the logistics of your estate plan and determine your financial worth based on factors that make up your assets in total. You can also see how your credit score plays a role in the process and take care of any additional purchases in advance.
You might consider paying for your funeral, covering a portion of a loved one’s funds, finishing off whatever may be left on your mortgage, and taking care of any other odds and ends that relate to loans and credit. You should also remember to spell out in writing the amount of money you wish to set aside for family members and any charities you wish to contribute to. Be sure to include as many details as necessary to make your requests clear. Don’t put it past family members, friends, and creditors to not take advantage of gray areas once you pass. Keep everything spelled out clearly so there is no miscommunication or uncertainty regarding your wishes.
Think Before You Act
You will want to reflect carefully on your assets and who you want to receive whatever you consider worthy of passing on. Some individuals choose to include sentimental aspects in their estate plans, such as written letters or trinkets that have meaning. You can also include funeral plans and any charitable donations you’d like to contribute to as part of your estate plan. The most important thing is to donate assets of true value to your loved ones.
You don’t have to stick to traditional ideas if that’s unfitting to you and your personality. If it makes more sense to pass on your record collection than your wedding ring, then do that. It will mean much more to the people you love if you stick to your authentic self. Some people even request that a speaker recite a joke or two at the funeral; this is all about you, so make it count.
Your estate planning is essentially your farewell to the world and those you love. Everyone is qualified and deserving of an estate plan specific to them. Don’t let misguided assumptions get in the way of planning for your future. Be creative and do your best to have fun with this not-so-fun process. Estate planning is a necessary headache, but it ensures that your legacy is carried out in the ways that feel the best to you. If you don’t take the time to spell out these preferences, your family and friends will do it for you, and that may not be what you want. It is true that estate planning is for the rich and wealthy, but it’s for everyone else in the world, too. That means that no matter what stage of life you find yourself in, it’s always a good idea to plan wisely.
Matt Casadona has a Bachelor of Science in Business Administration, with a concentration in Marketing and a minor in Psychology. He is currently a contributing editor for 365 Business Tips. Matt is passionate about marketing and business strategy and enjoys the San Diego life, traveling and music.