Estate planning is for everybody, not just the wealthy or those with extraordinary situations. The biggest reason for this is that, without a plan of your own, your state will provide you with a "one-size-fits-all" plan through its intestacy statute. Because each person has unique needs and goals, it is not a good option to fall back on these statutes.
A basic estate plan should cover a number of things. One can opt for a will-based plan or a trust-based plan. Trust-based plans can be handled outside probate court-avoiding its costs and hassles-and can keep matters confidential, both of which can be advantageous.
Durable powers of attorney and guardians are two particularly important things to address in one's plan. The executor, the individual who will carry out the estate plan, is another important selection to make.
Health care is a particularly important issue to address. One can do this through an advance healthcare directive. In these forms, one can detail one's medical preferences, particularly with respect to end of life issues. One can also appoint an individual to make decision in the event one becomes incapacitated.
Many people want to make charitable donations, and do so within the context of estate planning. While many wealthy people do this, one doesn't have to have a lot of money to do so. There are multiple means of working charitable wishes into more modest estate plans.
The most important step in the estate planning process is to get started. Once a plan is in place, one is not done, but should return periodically to update the plan and ensure it is still serving its purpose. In our next post, we'll pick up on this last topic.
Source: Huffington Post, "Is Estate Planning Just For the Rich and Famous?," August 9, 2012