Step One: Learn the Rules
Learning the rules can be fun if you have the right attitude. However, most don't view this as fun; rather, they see it as a chore to do when they are ready to die. But what these people don't realize is that they are actually doing estate planning every day.
You make decisions all the time about where you are going to work, how much money you make, how you spend your money, and how your money makes you and your family happy. As you make your daily decisions, you are probably thinking about what your children are going to do when they grow up.
Do you have a special-needs child? Have you considered whether someone would be able to take care of that child properly at home, or would the child need to be in an institution? The loss of a parent or parents could be disastrous for any child, but you need to think especially carefully about the best plan for a special-needs child. There are also rules about eligibility for institutions relating to income. Consider a “special-needs trust” if you have a child in this situation.
You may be considering how you are going to save money to help your children with college or assist them with their career choices. At the same time, you are planning for your own retirement. When you make everyday decisions for yourself and your family, you are engaged in the process of estate planning.
Several Options Available
When you learn the rules about probate, wills, trusts, joint property, and taxes, you are working on a plan that will come into being at your death. While you are doing your everyday planning, start thinking about how you would want your property managed for the benefit of your family when you are gone. You may decide that when something happens to you, it would be best to have your property distributed as soon as possible to your spouse or partner. If this is your plan, you may choose a simple will or you may decide that owning property jointly is the best plan for you.
If you have young children, you may think about who would manage your property and money for your children if something happened to you and your spouse. As you've learned, you can name a guardian for your minor children, but you may decide that the person you've chosen to raise your children isn't the best person to oversee their financial property. In this case, you could name one person to take physical care of your children and a different person to manage your children's money and property.
Perhaps during the planning process you discover that your family would need more money than you initially anticipated if something happened to you. This may lead you to investigate life insurance, or obtain more insurance, to provide for their security. As you can see, one thing often leads to another. It helps to know the rules and be aware of all the options available to you.
Estate Planning Can Be Like a Jigsaw Puzzle
Planning can be compared to completing a picture puzzle. Every piece of property you own and who is to receive it are pieces of that puzzle. Does a will fit in the overall picture? Where does insurance or your retirement plan go? Are any pieces missing from your plan?
Estate planning is a dynamic process. It can be exciting to learn the rules and to keep your plan current and ready. It's important to learn about all the options available to you before setting forth with one specific legal document or estate plan. In the following chapters, you will learn everything you need to know about your options. It's a good idea to keep a pencil handy. You may want to jot down notes on each option, naming the advantages and disadvantages, and whether that option fits into your picture puzzle.