First, what is an estate plan? An estate plan clarifies a person’s wishes and can help reduce the cost and time of administering the estate. You might think, I am just starting and beginning life, I do not need an estate plan, or maybe you think you will pass your business down to your children or partner, but that is far from the truth. Those days are long gone, and even if you do not have a large estate, you still need an estate plan.
The truth is that if you are over 18 and collect a paycheck, you need some form of estate planning to protect not only yourself but your loved ones and the legacy you will leave.
Depending on your stage of life, your estate plan might look different from a friend or family member. The following is not an all-inclusive list of what each stage of life will require, but it is a great starting point for you to consider as you continue to grow your legacy, hopefully for many years to come.
Young Single Individual
If you are a young single individual, you might not think that you need an estate plan, but you need to consider having a power of attorney for medical reasons and financial decisions in case of an accident that leaves you unable to make those decisions. This includes knowing where to locate your assets and even your passwords to accounts your power of attorney would need access to in an emergency or accident.
Married Couple with No Children
Married couples who do not have children might think there is no need to plan their estate, but that is not true. Married couples may need to depend on their significant other’s life insurance to replace an existing revenue stream. An essential item to review regularly on documents will be the beneficiary designation to ensure the beneficiary is updated and correct.
Married Couples with Minor Children
Married couples with minor children try to plan and guide the best path for their children. What schools, activities, clubs, and hobbies do their children participate in to have the best path for a successful life. One item that is commonly overlooked and not planned for is a need for a will to name guardians for minor children in the result of an accident.
Divorced Couples with No Children
A divorced couple without any children will need to check and review their life insurance and retirement documents to ensure accuracy and the correct distribution for their beneficiary designations.
Divorced Couples with Children
Divorced couples with children need to check and review all of their life insurance and retirement documents to ensure accuracy and the correct distribution for their beneficiary designations. But also the use of a trust to ensure assets are distributed per your wishes to your children.
Unmarried Partners
Unmarried partners that wish to leave their estate to their partner must have a will to ensure that the assets are left for their partner. Having a will with an estate plan will establish that your desires are met and help with the timeliness of distributing your assets.
Business Owners
In today’s world, individuals who own businesses can no longer count on passing their business along to a child or a trusted business partner. To ensure that the business and legacy they created are passed to the right person, an estate plan is essential to pass on the business and assets.
Aging Individuals
As individuals begin to transition into planning for retirement and enjoying their “golden years,” long-term care and elder care issues are an essential part of the planning process that gets overlooked far too often. Plan for all parts of retirement from the start as long-term care and elder care are an important part of the planning process!
If any of these situations feel like your situation or you have any questions you would like to have answered, please reach out to Elaine Dougherty, CPA in our Morgantown office at 304-554-3371. You may also email Elaine at edougherty@suttlecpas.com.