Estate planning can seem a daunting prospect. As with any complex thing, breaking it down will help it seem less so.
There are three essential areas to consider:
- What happens when I die?
This is what most people think of when talking about estate planning. You need to look for the best way to pass your estate to your family while minimizing how much is lost in taxes. Often it pays to start the transfer while you are still alive to reduce the applicable taxes.
- How will I retire?
However much you love your work, you might not want to do it until the day you die. Yet, if you have not put enough money aside, you may have little choice. There are many ways to save for retirement, and while it is best to start when young, it is better late than never. Saving alone is not enough. You need to see your money grow.
- What if I fall ill?
Ill health can strike at any point in your life, although age increases the risk. Medical bills could rip through your savings, leaving nothing for your retirement or your family. It is vital to understand how to manage your money so that Medicaid does not take it all.
You also need to give someone the power to make decisions and sign things on your behalf if you cannot. You can make clear your health care wishes to guide them.
While those are the three primary areas to cover, there are many variations in how you create your estate plan. Getting legal advice to understand your options will be crucial.