What do you think of when you hear the phrase estate planning? There’s a common conception that estate planning is only needed by the rich or the elderly, and not something that most people need to consider, particularly when they’re young and healthy.
This belief is actually one of the most common myths out there about estate planning, and it is holding many people back from taking some incredibly important steps to prepare for the future — personally, financially, and emotionally.
“What Is an Estate Plan?”
Put simply, estate planning is the process of making arrangements during your life for what will happen to your estate when you become incapacitated or die.
This includes many different and important elements — from planning ahead for your burial, to preparing for the potential effects of a long-term illness, to making sure your most important assets are distributed in line with your wishes when you pass away.
Depending on your circumstances, estate planning may mean coming up with a strategy to protect and oversee the inheritance of your home, vehicle, financial accounts, and precious personal possessions. Often, estate planning also includes safeguarding your family’s financial future, and naming a guardian for your children or any disabled adults in your care. Among other important elements, a comprehensive estate plan may typically include:
- A will. This is a legal document by which a person may express their wishes as to how their property is to be distributed at their death; name guardians for their children; and appoint the executor who will manage their estate until its final distribution.
- A trust. This legal arrangement allows a third party, known as the trustee, to hold and manage assets chosen by the grantor, on behalf of one or more chosen beneficiaries.
- Naming a power of attorney for healthcare and a power of attorney for finances. These legal documents outline who will make your medical and financial decisions if you become incapacitated.
- A living will. Also known as an advanced directive, this short legal document allows you to provide a medical directive and dictate your end-of-life wishes.
Along with these common mechanisms, estate planning also encompasses important everyday steps like naming or updating the beneficiaries on your financial accounts; considering your life insurance policy; and creating funeral plans or directions for how you want your body to be handled after death.
Without a plan in place, your loved ones may face a long, complex, and expensive process dealing with your estate after you pass away. Planning ahead can streamline and simplify things, and make sure the people you care about are protected in a difficult time of transition. On a personal level, estate planning can help you start to face the future, letting you move forward with confidence and peace of mind. Having an estate plan in place can allow you to expect the unexpected, and make some of life’s biggest transitions feel less daunting.
“Is There a Right Time to Start Thinking About Estate Planning?”
There is no universal “right” or “wrong” time to get started with estate planning. The most important thing to keep in mind is that there are important estate planning steps you can take at every stage of life’s journey — whether you’re in your 20s or your 50s, single or married, ready for parenthood or planning to remain childfree.
It’s also crucial to remember that estate planning is not a “one-and-done” affair. Instead, it is an ongoing process, and you may need to manage, revise, and update your estate planning documents and strategies as time goes on.
So, how will you know if the time is right for you to start thinking about creating or updating your estate plan? While everyone’s journey through life will be unique, there are a few common moments that may shift your perspective, and make estate planning start to feel all the more vital.
Here in Chicago, estate planning may be an important consideration to factor in when you…
Get Married or Divorced
Getting married is a major step forward on its own, and also tends to come with plenty of other significant purchases and lifestyle decisions to take into account. Creating or updating your estate plan can be a way to make sure you’re taking care of your new spouse, and protecting the life you’re beginning to build together. If you are widowed or divorced, it may be necessary to update your estate plan to protect your assets and bring your decisions more in line with your current needs and goals.
Give Birth, Adopt a Child, or Become a Guardian
Whether you give birth, adopt, or become a guardian to a minor, bringing a child into your life can be an incredibly joyful experience. Whenever your family grows, it’s important to update your estate plan to consider the well-being of the children in your care. You can use your estate plan to designate a guardian to protect your children if anything happens to you or your spouse. Creating an estate plan can also allow you to determine how and when your child will receive any inheritance upon your passing.
Adopt a Pet
Have a furry friend in your life who means the world to you? You can certainly factor your pet into your estate plan, including leaving guidance for who you would like to care for your animal companion. You can also use a trust to allocate resources for the well-being of your pet.
Buy a Home
Owning a home is often considered to be a key part of the “American Dream.” If homeownership is in your future, you may want to devote some time to planning ahead to protect this important asset. Estate planning will often include naming a beneficiary for your home, along with other valuable property like family heirlooms, vehicles, jewelry, artwork, or furniture.
Build Your Wealth
Taking a new job that comes with a big increase in your salary? Setting up financial accounts, updating your investment portfolio, or taking out a new insurance policy? A key part of your estate plan will include naming beneficiaries for these important financial assets. On the flip side, if you take on new debts, it may prove important to carefully factor these into your estate plan as well — so that they don’t become overly burdensome for your loved ones down the line.
Experience the Death of a Loved One
Losing a loved one can be an incredibly challenging time. The emotional toll of losing someone near to you can be immense. Going through a difficult or time-consuming process when a loved one passes away is often an eye-opener, which often leads people to start thinking about how they might make probate and estate administration easier for their family in the future. If you have already started shaping your estate plan, you may need to update your documents and plans if a loved one named in your paperwork predeceases you.
Get Closer to Retirement Age
Moving closer to retirement often comes with some important financial decisions, including planning for long-term care and figuring out how to best manage and allocate the assets and property you’ve gathered over the course of your lifetime. Estate planning is an important consideration to take into account in this stage of life, and may include reviewing your assets and updating your beneficiary designations; giving someone the power to make healthcare and financial decisions on your behalf in the event that you become incapacitated; and planning for your legacy goals, including charitable contributions to the causes and organizations that matter most to you.
Deal With an Emergency Situation
The ongoing coronavirus pandemic has been “prompting an increasing number of people to establish wills and take care of estate planning,” as Scott Simon recently explained for NPR. The COVID-19 outbreak is an important reminder that the future can be unpredictable. Taking steps to get your estate plan in order can help provide you and your family with peace of mind, and make it easier to navigate urgent decisions during emergency situations, both now and in the future.
Getting Started With Estate Planning
Experiencing a major life transition can truly underscore the need for planning ahead, and taking steps to care for the people who matter most to you — whether that includes preparing a basic will, setting up a trust, designating a power of attorney, or preparing a living will/advanced directive.
Bottom line? Estate planning is one of the most important things you can do to provide for your family in the future, no matter where you may be starting from right now.
Do you have any more questions about estate planning? Curious about what you need to get started, or how the process may work here in Illinois? Interested in talking about your unique circumstances with a compassionate, experienced, and knowledgeable legal professional?
Law Offices of J. Jeltes, Ltd. is a team of experienced and compassionate advocates handling legal matters in some of life’s most challenging family transitions, including divorce, adoption, and losing a loved one. We know that restructuring a family, planning for the future, or making a huge life change can be a vulnerable time, and we endeavor to remain extremely thoughtful and effective in helping you achieve your goals.
Founded in 2009 and offering more than 20 years of combined experience, the Law Offices of J. Jeltes, Ltd. will be driven, attentive, and dedicated to achieving the best result possible for your goals. Ready to keep the conversation going? Don’t hesitate to contact us to set up your comprehensive one-on-one consultation.
Dealing With COVID-19: We’re Here to Help
In this sensitive and unpredictable time, we know that many people here in Chicago and around the country are thinking about their legacies – and taking crucial steps to plan ahead and prepare for whatever may come. Whether you are a first responder in the line of fire, a parent looking to protect your child, or a young family preparing for the future, we want you to know that we are here for you.
As our community adjusts to the ongoing efforts to contain the spread of the COVID-19 virus, the Law Offices of J. Jeltes will be working full-time, remotely. Our support staff will continue to be able to assist you and will be receiving all calls and messages during our normal business hours, 9:00 a.m.- 5:00 p.m. We hope everyone is practicing self-care and staying safe and healthy. For more information and to stay up-to-date on important updates, as we learn them, please connect with us on social media, or get in touch with any questions or concerns.