Benjamin Franklin famously observed that the only thing certain in life is death and taxes. What he's less famous for, is that he was also the inventor of life insurance. He invented fire and crop insurance, too. Meaning, he accepted the certainty of death and other tragedies, but that such inevitabilities didn't mean he was defeatist. Instead, he realized it was all the more important to prepare for what lies ahead. And by doing so, we protect both our future and our present.
A couple hundred years later, I myself have witnessed the relief that comes with preparing future. When clients realize their plans are set and their futures are provided for, their shoulders drop and the tension leaves their faces and necks. I love seeing this happen because I've helped people achieve peace of mind.
Yet, ironically, when people first begin to consider estate planning, most do think of it more like "taxes" than "death." They think that estate planning is about that ultimate, unavoidable paying to the piper. However, once again, Franklin had it right. As we're going to discuss, good estate planning is closer to getting insurance than paying taxes: It's about protecting the physical and fiscal health of you and your family.
This is an introduction to estate planning. It's not meant to explain all the issues in depth, but I want to give you enough information so that you will know the questions to ask and will feel prepared for a comprehensive estate planning discussion. Most of all, I want you to know why estate planning is important: why you need a plan and what it should cover; when you should start the process; what could happen if you never get around to it; and what your loved ones can expect to happen after you have passed.
Many people believe an estate plan isn't necessary unless you're basically a British lord with an actual country estate. The reality is that you probably have more in assets than you realize-whether it's a house or car, a stock portfolio, investment or savings account. Maybe it's prized comic book collection or a couple pieces of jewelry. The point is that, if you have something of value to you that you'd want to pass it on, then you have enough of an estate to protect with a plan.
At the same time, you have people in your life that you care about, and you'd like to protect them, even after you're gone. If any of that is true, you need an estate plan to make that happen.
Another common mistake: many people make the mistake of putting off estate planning. They'll wait until they're older, or the estate is bigger, or life seems to have a bit more risk than they can tolerate, or they just have more time. But once again, let's go back to Franklin's radical idea that you buy fire insurance before a fire occurs. You don't buy fire insurance when the fire truck is en route, and you don't buckle your seat belt just before your car crashes. The point of planning is to put things into place before the need arises.
Moreover, estate planning is not the same as writing your autobiography. You don't need to wait until you've nearly finished accumulating your wealth, or have something worth mentioning. It is a plan, meaning that you start now, wherever you're at. Then, just as you update insurance after buying a new house, you'll revisit and revise that plan as needed. That's probably every two or three years, or whenever you make a major life change, but it's wise to review it annually. You can pick the seminal event that reminds you to do it - your birthday, New Year's Day - whatever resonates with you.
Because if the intent is to protect your future, the plan must work with your current life and goals.
This is a resource to help you begin that planning process.
And to help you to enjoy the present peace of mind that clarity about your future can bring.