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3 things to keep in mind when you plan your estate

On Behalf of | Mar 24, 2022 | Estate Planning |

Estate planning is an important task for the typical American adult. You have family members who depend on you, like your spouse and your children. You have financial responsibilities that will legally remain even after you die.

Your estate plan gives you an opportunity to establish a legacy for yourself and to protect the people you love. As you start thinking about your estate plan, there are three important things that you should keep in mind.

An estate plan isn’t just about your death

Your estate plan obviously needs to address what happens to the people who depend on you and the property that you own when you die, but it can also protect you if you experience an unpredictable medical emergency. An aneurysm or a scaffolding failure at work could leave you in a coma for weeks.

You can create advance health care directives that govern your medical care when you can’t speak on your own behalf. You can also create powers of attorney so that someone you trust can take care of your financial responsibilities. Thinking about when you could be vulnerable in the future is as important as thinking about when you might die.

Your estate plan does not necessarily have the final say

An estate plan and specifically a will can help you control what happens to your property after you die, but those documents aren’t always the ones that determine what happens with specific assets. If you create a transfer on death designation for a financial account or if you add beneficiary designations to a life insurance policy, those designations will usually take precedence over what you include in the estate plan.

Not everyone can handle an inheritance

Another important consideration is how to structure the bequest that you make and the personal histories of the beneficiaries included in your plan.

A direct inheritance can be dangerous for someone with a history of severe drug addiction or compulsive shopping. A family member with special needs could potentially be vulnerable to financial abuse or lose state aid because of what they inherit. Adding a trust to your estate plan can be a way to leave assets for those who are vulnerable or have a history of poor self-control.

Keeping these significant issues in mind as you begin planning your estate will help you make the best possible arrangements for yourself and those who depend on you during your most difficult times.

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