When most hear the term “estate planning” they conjure up images of someone on their deathbed surrounded by a bevy of lawyers choosing which favorite son will reap the benefits of the empire they have built. This is a fictitious image that is promulgated by the mass media especially Hollywood. This is the image we get in the movies when an individual is facing his own mortality.
Estate planning goes far beyond just picking out the beneficiary of your amassed wealth and starts long before you are actually on your deathbed or even take ill. Estate planning is simply about being prepared for any eventuality and yes, that includes death, but by no means is death the only outcome you should prepare for.
What of other emergencies such as a prolonged illness or extended period of unemployment? Estate planning takes all of these and many more possibilities into account and plans for them in a structured way. The number one way to plan for the future is to take care and protect yourself while you are still healthy.
Protecting yourself by ensuring that you have the right documents prepared for any eventuality, documents like medical directives or powers of attorney are things you will want to have in place long before you actually require them. Estate planning does also include those things that we consider when we hear the term, and picking beneficiaries is a very common and important part of that process but by no means the only one.
If you do not choose beneficiaries or take out a will at all then you leave yourself at the mercy of the state to do whatever they decide with your belongings and will absolutely claim any wealth that you leave behind for themselves. This is only alleviated through proper estate planning and if for any reason this one alone should motivate you to consider doing something rather than doing nothing.
The government has after all taken enough through your life and should not benefit from your death as well. In keeping with that theme, proper estate planning also entails ensuring that you pay only the taxes that are necessary and that the amounts you pay are not excessive or arbitrary. While estate taxes really only affect the very wealthy the lack of proper planning can mean the difference in paying a substantial amount more for those lucky folks.
Estate planning is not a done once and finished proposition either, just as life changes and evolves so to should your planning. The birth of a new child or grandchild or death or divorce can all have an impact on your life and need to be contemplated and planned for in your wills and other documents that are necessary in life and death. Estate planning is never something we want to consider but it is very important to fully understand and plan for all eventualities and that includes death as unpleasant as it may be.