09 Jan Make Creating an Estate Plan Your New Year’s Resolution
According to Investopedia in an interview with Jennifer Guimond-Quigley, $30 trillion in wealth is set to change hands between Baby Boomers and their heirs over the next few decades. Unfortunately, this topic is often seen as too depressing, and families wait until the last minute to broach the subject. Instead of putting it off, ensure your loved ones are protected and your wishes carried out by making an estate plan part of your New Year’s Resolution.
Here are a few items to consider when beginning the process.
Don’t Assume Estate Plans are Only for the Elderly
It is a common misconception that an individual needs to have acquired wealth to warrant an estate plan. The reality is as soon as an individual is over the age of 18, a proper estate plan is crucial in the event of an untimely passing. Such documents as an Illinois Healthcare Power of Attorney and a Property Power of Attorney allow the principal to appoint an agent to make healthcare and financial decisions when that individual is unable to do so. Planning is especially important when children are involved. Designating short- and long-term guardianship is a step every parent should take to ensure children are cared for and receive their proper inheritance.
Choose the Proper Documents
Wills and Living Trusts are two of the most common tools when it comes to estate planning, but many people do not fully understand the difference between the two. A Will is a document that outlines who will inherit property upon the creator’s death, designates guardians for minor children and appoints a legal representative to make sure wishes are carried out as stated. It goes into effect only after the creator has died. A Living Trust is a pool of assets, such as cash, property or investments, managed by its creator (or a third party trustee) for the benefit of the person who established the trust, or other third parties. Unlike a Will, a Living Trust goes into effect immediately upon its creation.
Avoid the Do-It-Yourself Options
There are countless online resources that purport to draft an estate plan from the comfort of your own home and with the click of a few buttons. However, these impersonal tools typically operate on a one-size-fits-all system, which does not take into account unique individual situations. It is also important to remember that these websites are not permitted to give legal advice. In fact, they tend to limit their own liability to the cost of the software or program purchased. The slightest mistake can prove disastrous, which is why it is essential to consult an attorney.
In addition to personal estate plans, business owners should put together a contingency plan for their company. Click here to read more about what that entails.