In our previous post, we began looking at basic reasons for adults to think about estate planning, even young unmarried adults. As we noted, this week is National Estate Planning Awareness Week, and it is as good a time as any to start thinking about getting the wheels turning about how you wish to order your estate, if you haven't done so already.
We left off discussing the reasons for unmarried adults to think about estate planning. For the married, there may be even more reasons to think about planning.
Married spouses should each have their own separate will. Among the most important of provisions is naming guardians for any minor children. For many, this is the most important matter to see to in an estate plan. And it is a very personal decision which should be taken seriously. If no guardians are named, a court will take it upon itself to select somebody. And that person may not be who you would wish to raise your children.
Married people should also think about setting up a trust to manage their children's assets in the event both spouses die before they are adults. Life insurance is another important aspect of estate planning, which no spouse should be without.
For the wealthy, there is the issue of minimizing their taxable estate. There are a number of different approaches to reducing the size of an estate, such as taking advantage of annual gifting to family members as well as paying tuition or medical expenses. An estate planning attorney is an invaluable resource for approaching this task.
Senior citizens and those who are sick, if they already have a will, should be sure to update it, including any powers of attorney and their health care directive. Circumstances and preferences can change over time, so updating one's estate plan is an ongoing task. Senior citizens might also consider setting up a revocable living trust and naming a trustee to manage their assets if they are unable to. Seniors should also be sure to communicate with their family about their estate. Doing so can often reduce the surprise factor later on.
Of course, there are many other possibilities for estate planning in each of the groups we've discussed, but these are the basics. The point is that there are plenty of reasons for every adult to do at least some estate planning.
Source: Wall Street Journal, "Get an Estate Plan. Now.," Rachel Emma Silverman, October 18, 2011.