So many people put off estate planning. When you’re young, you don’t think you own anything of enough value to be concerned. When you’re older, professional and personal responsibilities take up so much of your time that planning for the (hopefully far off) future seems like it can wait.
Sixty-seven percent of Americans don’t have an estate plan, and most who don’t just haven’t set the time aside to make preparations.
The truth is that it’s never too early to start your financial planning. In fact, putting off estate planning can limit your options. In the worst scenario, it could mean leaving your family to deal with your debt or probate issues.
What Is Estate Planning?
An estate plan is when you make arrangements in advance to handle your estate, naming specific people or organizations who will get your belongings and other aspects of your estate when you pass. While many believe older adults are the only ones who need to handle their estate, young people can benefit from estate planning.
You may have a preconception that tells you that estate planning is a time-consuming and expensive process. That’s not necessarily true. If you have straightforward finances, your estate planning process can likely be handled simply and in minimal time. And it will protect your loved ones in the event that something happens to you.
Virtually every person who owns anything of value has an estate. Even if you’re just starting out, you likely have a bank account, savings, own a vehicle, etc. Those belongings are all part of your estate. If you have a job with a retirement plan, that plan is part of your estate. You might also have life insurance and any number of belongings.
All the things you own and the debt you’ve accumulated belong to your estate. A small estate actually makes you more vulnerable because, when you pass, the red tape can make it costly for your family to settle your estate since the value of your assets may not cover the expenses.
When to Start Estate Planning
If you’re rendered incapable of handling your finances, it leaves your family in a difficult position of trying to assign someone to act as your legal guardian. Depending on the law in your state, it might not be the person you would choose to assign yourself.
Estate planning includes writing a will and making decisions about who your beneficiaries are in the event you should die, but it’s not just about bequeathing your possessions.
What happens if you’re rendered incapacitated? What happens if you have a memory issue and can no longer legally assign your own caretakers? These issues can all be assigned through the estate planning process. In the worst-case scenario, you’re not leaving your family members with costly legal expenses to designate your medical and financial guardian. Handling an estate without a will and other arrangements can be challenging for families, so this is an important step if you have a large estate or specific wishes.
This is how many people find themselves in a conundrum. Once an older adult is diagnosed with a memory issue, it may be too late to take legal precautions to protect their assets and provide the best care for their long-term needs.
Regardless of your age, estate planning should be a priority. Below is how you can handle estate planning and the steps you can take for every stage in life:
Just because you’re in your 20s or early 30s doesn’t mean you shouldn’t get your affairs in order. Once you turn 18, you have complete control over your financial and health decisions. Once you become an adult, consider meeting with a lawyer to discuss the power of attorney and your health care directive.
Power of attorney gives the person of your choosing the ability to make decisions for you if you can’t. Your health care directive outlines specific actions to be taken about your health if you can’t make these decisions yourself.
Many middle-aged individuals in their 30s to 50s may have children or grandchildren and have likely accrued various resources by this time. Getting everything in order now ensures your estate is protected and your children will be taken care of if something happens to you.
When you reach your mid to late 30s, you should work with your lawyer to create a trust or will. Having one of these documents will make it easier for your loved ones to handle your affairs if you pass. Depending on your needs, a trust may work better than a will — a legal professional can help you determine which is best for your situation.
Elderly adults are most often associated with estate planning. While planning early in life is important, it’s never too late to create a plan. If you started planning early in life, you can revisit these documents at this stage in your life to ensure everything is handled. You’ll also want to ensure all documents are up-to-date. You can also make changes if you’ve gained new assets.
If you haven’t gotten your affairs in order, you can speak with a lawyer to start the process.
How to Deal with Your Loved One’s Estate Plan
The truth is that many people don’t think about estate planning until they’re in the thick of it. If you have a parent or elderly relative who’s recently downsized and considering their estate options or has left you their home, it can be a great reminder that we all need to plan for our property — especially if there have been complications getting through their estate due to a lack of planning.
If your loved one has left you their estate, there are steps you can take to ensure everything is handled properly:
- Take inventory: When a loved one passes away or if you’re liquidating their assets, you’ll want to find all the documents and property in their name. Ensuring you have these documents will make getting through the red tape much more straightforward.
- Notify the Social Security Administration: The Social Security Administration needs to know about the passing of your loved one, so it’s essential to gather their contact information and inform them when you can.
- Keep property safe: If your loved one leaves you their home in their will or trust, remove any valuables and ensure the house is secured to prevent theft and vandalism.
- Address debt: Some individuals leave behind debt when they pass, and it’s essential to address this debt as soon as possible to prevent collectors from reaching out to you.
- Open claims: If your loved one had insurance or retirement accounts, notify the providers to open a claim.
- Contact an attorney: An attorney can help you handle many of the tasks above and help you manage any additional duties quickly.
Get an Offer on Your Loved One’s Estate
If you are in the position that you’ve inherited their home or need to liquefy a loved one’s assets to prepare for a transition to assisted living, HomeGo can help. Dealing with a change in health status for a loved one can be draining and time-consuming, but selling the home doesn’t have to be. Our local agents can provide you with a same-day cash offer and close in as little as seven days.
If you’re ready to sell your loved one’s home or need to liquefy their assets, contact us today to learn how we can help.