As retirement looms, most of us recognize the need for planning, realizing that a failure to plan could mean that we have insufficient assets to make it to the finish line. However, when it comes to estate planning, those same people take the “Scarlett O’Hara approach: “I’ll think about that tomorrow”.
It’s important to avoid Scarlett’s selfishness however; estate planning is a thoughtful gift for your family and friends. In fact, you should think of estate planning as your guide on how things are supposed to be, the manner in which your wealth will be divided, a method to minimize stress on your loved ones and a device that avoids nasty family fights that can occur after the funeral. You can and should minimize problems and decide some of the tough issues before you pass away.
While retirement planning is a much broader subject, your estate plan should be viewed as a vital component of your life plan. Undeniably important, estate planning has just three simple goals:
To give you control over your assets as long as you are able to do so.
To protect you and your loved ones in case you become incapacitated.
To distribute your assets in accordance with your intentions after your death.
Again, a retirement plan has broader goals such as:
- Ensuring that you have enough assets to support your retirement lifestyle.
- Ensuring that potential health care issues can be met in the location where you retire.
- Proximity to friends and family.
- Deciding what to do with the time you previously devoted to your job.
- Creating an estate plan that is consistent with your goals.
The earlier you start your estate planning, the better. If you are 18 or older, you should have a basic estate plan in place and like retirement planning, estate planning should start on your first day of work! As spring approaches, so too do college and high school graduations. Don’t forget that every 18 year old needs at least powers of attorney for healthcare decisions.
Reference: Federal News Radio (February 3, 2016) "Estate vs. retirement planning: You bet your life, literally!"