Thinking and conversing about your own death can be difficult to do, but working through the process is just as important as planning for life’s other milestones — going to college, building a family and retiring.
What is estate planning?
Estate planning is creating a plan in advance for what will happen with your assets — your money, possessions and children — when you pass away. An estate plan is a set of legal documents, such as a will, trust, power of attorney, that directs where you wish your assets to go and helps preserve your legacy. It can be a difficult subject because estate planning forces you to face your mortality. Perhaps that’s why more than half of U.S. adults do not have estate planning documents in place.
Help your family avoid emotional stress by preparing ahead of time
If you die without an estate plan, it can push your family into unfamiliar territory. The result can be emotional stress and tension between your heirs as they wrestle with how to divide your estate equally and navigate complicated tax matters.
Estate planning is not just about distributing your things after you are dead, it is about the relationships you have established in your life. While the law may dictate certain expedient ways that property should be distributed in the absence of other instructions, there are mechanisms that allow you to ensure that family and friends receive things from your estate that may have sentimental value. So, what do you think would be better? Ensuring that items with special value pass to the people most likely to enjoy those memories, or just letting the whole lot get distributed to your family based on generic inheritance laws?
The biggest hurdle most people have to overcome when it comes to estate planning is their own reluctance to consider their mortality. You can leave items to people in your will or via a living trust, or you can give them away while you are still alive, but whatever you do you must make the plans now while you are alive and well. And, when it comes to leaving things to your friends (instead of your family) there is a good reason for that.
Estate planning decisions are naturally overwhelming and emotionally charged. But it’s always better that you perform this “heavy lifting” instead of leaving it to your family down the road.
