Do you know people who have not written a will or made an estate plan? Even if you never talk about it with them, you probably do. A shocking amount of people have never drafted a will. They just keep procrastinating and putting it off.
There are dozens and potentially hundreds of individual goals for an estate plan, which differ from person to person. What your goals are depend on what assets you have, what you want to accomplish and what your family needs.
When you draft a health care proxy, the goal is to pick an agent who will then act on your behalf. If you cannot make medical decisions, they make them for you.
The general assumption in the modern world is that life expectancy should keep going up. As medicine advances, people live longer. We haven't had a war on the scale of the World Wars in generations, diseases are more contained than they have been in the past and technology has improved at a simply astounding rate.
In some cases, parents do not want to leave their homes to their children. They feel like it would just be a burden for the kids to have to decide if they want to keep it or sell it -- not to mention going through with the sale and splitting up the money. It can even lead to estate disputes.
If you decide to use a trust for your assets, it can prevent the children from using those assets in the way that they want. For instance, a trust could stipulate that the child does not get any money until age 30 or that the money has to be used to pay for college tuition.
Funeral planning is a simple necessity, but it can be hard to bring up. It feels a bit awkward to talk about something that many of us spend so much time trying not to think about.
If you think that your estate plan just needs to address your assets, it's time to dig a bit deeper. To create an effective plan, you not only need to pass your assets on to your heirs, but you need to do it in a way that minimizes conflict. You want them to have strong family ties for the rest of their lives, after all, and you want to avoid litigation and estate disputes if possible.
You're thinking of setting up an educational trust for your grandchildren. You know that you can put age limits on it, preventing the children from using it until they turn 18. You also know that you can limit it so that the money can only go toward their education.
When your estate goes through probate, it gets divided among your heirs and other beneficiaries. This process is long and complicated for some people, while it is relatively easy and straightforward for others.