Many of us believe that we are going to live forever. Perhaps it's the once a week trip to the gym, or the genes on your mother's side of the family. But the only guarantees in life are death and taxes. It's with this in mind that parents should make will and formulate an estate plan so it doesn't cause undue stress on the surviving family, sometimes even tearing a once harmonious family unit apart.
A smart estate plan protects what you worked so hard to accumulate over a lifetime and it should be a final chapter of you as a loving and attentive parent or benefactor. More than simply dividing up money and possessions, estate planning is tailor-made for each client and their loved ones.
Here is an estate plan primer for things you need to consider as you go through the process:
Sign a will.
Unless you say otherwise, everything will get divided equally between the kids and a current or former spouse. Specific things going to specific people is typically only guaranteed if there is a will.
This can change when kids enter the picture. It should also be updated to reflect if there has been marriage, divorce, remarriage, death of spouse, etc.
Establish durable power of attorney.
Durable power of attorney insures that there is a person in place to make sure your wishes are honored, such as when you are too incapacitated to make decisions regarding your medical care. They should also be able to manage your money and assets if you are living but too sick to do so yourself. If you don't do this, a friend or family member will have to ask a judge to appoint guardian or conservator.
Get your financial papers in order.
By this we mean the physical financial paperwork and estate paperwork as well as any appropriate digital records or assets (perhaps there was an online stock trading account).
You may also want to leave a letter.
Perhaps this is a message to your survivors that explains the thinking of why you constructed the estate the way you did or something more of a personal goodbye. It may provide comfort and closure to loved ones.
While this may seem like a daunting or unpleasant task, it will be doubly so for those who survive you. Less than half the people in the U.S. have will or estate plan. But if you start to think of it more as the legacy of you want to leave behind, the job will perhaps get less depressing. If you or a friend is considering estate planning, a lawyer experienced in estate planning will also be a huge asset that could more than pay for his or her services. You can't plan for every contingency, but having an estate plan will likely cover all major concerns.