Some people think they don’t have enough assets to make an estate plan. But creating an estate plan can be beneficial even to those without a significant nest egg. Here are five reasons estate planning can be advantageous to not just your heirs, but to you as well.
Accidents happen. What will your family do if something were to happen to you? A properly thought out estate plan has you covered. Start by selecting a life insurance plan that’s right for your family. Your spouse will feel more secure knowing that you have ensured that he or she will be covered in case something happens to you.
Appoint someone you trust to look after your well being. Set up a medical power of attorney that designates someone to make health care decisions on your behalf if you are incapable of making these decisions on your own. If you develop an incapacitating medical need, you want to make sure the person in charge of the decisions will carry out your wishes.
Choose how to distribute your assets. No matter how much money you have, there are probably assets you can pass on to your heirs. An estate plan will allow you to divvy up your assets exactly according to your wishes. Take care to select who gets your house and investments. Without an estate plan, your possessions may not go to the person you want them to go to.
Spare your heirs from potentially difficult situations. Fighting over money amongst family members is probably one of the nastiest legal battles that can occur. There are situations where splitting everything equally can still seem unfair. If your estate plan is carried out according to your own wishes, there are fewer chances the decision of who gets what will fall upon your heirs. Having a estate plan could also help keep more money in the family because there are less legal fees involved.
Take inventory of your assets. Taking stock of your assets can also help with your retirement planning. When you plan your estate, it forces you to think about how to maximize the value of everything you own, which is necessary for both your estate and retirement plan. Making an estate plan can help you accomplish these two major goals at the same time.
David Ning runs MoneyNing, a personal finance site aimed at helping others change their habits for a better financial future. He suggests that everyone to sign up for an online savings account to get more out of our hard earned money.