You have probably heard that you need to make an estate plan, but you may not understand why or even what the term “estate planning” means.
Essentially, an estate plan is the plan for what happens if you become incapacitated and when you pass away. And, it only becomes more and more important the older you get and your assets and responsibilities grow.
Reasons for young people to plan
For young people, estate planning is likely the furthest from your mind. However, there are various reasons why you need one. If you have minor children, you need to name a minor to care for them. If you have any assets, they will need to be handled when you pass and if you become incapacitated, someone will be empowered to handle your affairs until you regain your faculties.
If you are in a coma for a month, you could lose your apartment, car, job and incur various other consequences.
Reasons for mid-life people
For those later in life, these same reasons remain true. However, you most likely have children, possibly more than one, and your assets will be much greater. This means that your reasons for estate planning have become more urgent. You may now even have a business that you will need to have a succession and continuity plan in case of incapacity. You may also have charitable goals that can only be effectuated with an estate plan.
Reasons for older people
As you get older, your estate plan will become even more important. The original reasons are now more urgent, but now, you have additional considerations, elder care planning. And, as your estate is now the largest it has ever been, the estate plan will become more complicated, as well as, perhaps, multiple generations of bequests to plan.
When to start
The best time to start is now, and it is always easier and cheaper to start when you are younger when the estate planning is much less complicated. Then, as you age, you can update it as you age. There is no one-size-fits-all process, no matter what the internet may tell you, but you can begin the process today.