When you say Estate Planning, it causes a variety of reactions. Some people think it doesn’t really apply to them because they don’t have “a lot of money” or property. Others don’t want to think about what’s going to happen after they die, and still others think it’s something to start thinking about after retirement. Like most financial matters these day, however, estate planning is something to get into early, learn as much as you can about and revise and refine as you go along. Life is nothing if not full of random occurrences, and though you may be in your 30s with a new home, two new kids, a great career and a long life ahead of you, not anticipating what may be around the next corner is a gamble you and your family really shouldn’t take. Estate planning encompasses a number of things.
Investments. If you want to make sure your family is taken care of when you’re gone, you need to begin investing in their future now. From real estate and mutual funds to items like art, antiques and collectibles, think about your estate as a litmus test for purchasing things that will maintain or increase their current value – of thought and wisdom rather than impulse. Even something as simple as driving safely and maintaining your car is in some sense an exercise in estate planning – avoiding risk and maximizing value, be it financial or strictly utilitarian. In any case, estate planning is a matter of making long-term investments, of buying low and selling high to a certain extent, and of maintaining the value of your investments, whether they’re mutual funds or real estate.
Insurance. In general, the younger you are when you begin paying into an insurance plan, the better the rate. So begin looking into insurance now – you’ll be surprised how much more your monthly bill for the same coverage will be ten years hence. Types of insurance to look into include, of course, homeowners, personal property and life insurance, as well as various types of disability and long term care insurance should you become incapacitated and unable to work. Make sure you understand the terms of your insurance – while more expensive, insurance policies that increase in value over time may be a better investment than those which, for example, expire when you’re 85. If, however, you’re starting late at getting insurance, such “term life” policies may be worth a gamble.
Lawyers, accountants, investment planners. Finding a good lawyer, a good accounting and a good financial advisor in whatever combination can be worth its weight in gold, and it’s a good idea to start young. Checking your college alumni association, asking friends and colleagues and reading financial publications, particularly local financial news, are all good ways of identifying potential professional help. Find people and companies you can trust and stay with them – these are, next to your immediate family and work, the most important relationships you’ll build over your lifetime. And be a tough customer – if you have a question, ask it and, just as you would with a doctor, if it’s a matter that you still don’t understand or even if you just have a gut feeling, get a second opinion.
Wills, Powers of Attorney and other legal documents. Again, the earlier you make these arrangements the more protected and secure you, your family and your assets will be. Though there are often a lot of emotional issues around creating a will and contemplating your own or others mortality, try thinking of these things as constantly changeable documents – and treat them that way based upon changes in your own life, from buying property to getting a divorce to having another child. Making sure your will and other documents are up to date for you, your spouse, and your family is perhaps the simplest and least time consuming of all Estate Planning chores, and can greatly increase the sense of security that both you and your family have against unforeseen events.
Exercise common sense. Planning your Estate is basically about caring for your loved ones, don’t complicate it by trying to use your Estate to resolve relationship conflicts or settle old scores – be fair and take the long view.