Why Is Estate Planning So Important, Regardless Of Your Wealth Or Age?
By Myka Landry
Many people believe estate planning only deals with the distribution of your assets after your death. In reality, that is just one part of the estate planning process.
Yes, a comprehensive estate plan deals with assets at death. But it also provides instructions as to how you want your affairs handled if you should become incapacitated.
For example, what happens if you are in an accident and cannot handle your own finances or make your own medical decisions? Who will make these decisions for you? Who will care for your minor children?
These are a just a few of the questions that you answer and decisions that you make when you prepare a comprehensive estate plan.
Since these issues deal with much more than just your assets, it is important to have an estate plan regardless of how many assets you have. You also need to have an estate plan regardless of your age, marital status or family situation.
Without an estate plan, no one (not even your spouse) can automatically make medical decisions for you. They cannot handle your finances, your investments or other assets in your name. They cannot sign contracts for you or apply for Social Security, Medicare, Medicaid or disability insurance. They cannot deal with your health insurance providers. And, without a HIPAA authorization, they cannot even talk with your doctors about your health condition or medical needs.
If you become unable to handle these issues for yourself and do not have an estate plan, you and your loved ones would likely have to go through a court process. The court would appoint someone to do these things for you. This may not be the person you would choose. With an estate plan, you make the choice. Not only do you select the person you want to make these decisions for you, you also are able to express your wishes as to what decisions should be made.
As a side note, many people don’t realize that once children reach age 18, their parents can no longer make medical decisions or handle their finances for them if they cannot. This is true even if your children are in college or you are supporting them financially. Even 18 year olds need a very basic estate plan in place to ensure that their wishes will be carried out.
The choices as to who will make decisions for you and what decisions should be made are important. They should not be made lightly. That said, the best time to make these decisions is not when you are facing a crisis. The time to make them is when you can think about these decisions carefully and really contemplate your situation and what is right for you.