Estate Planning: What You Need to Know

Posted by: Liwin Troy Lee
BY: Paul Sullivan

Estate planning rarely gets the attention it should get.

Saving for your children’s education, purchasing a second home, deciding when and how to retire — these are all topics that people talk about with their friends and their financial advisers. But deciding what happens to whatever is left of your money when you die is often passed over. It shouldn’t be, though, because it is crucial to a financial plan.

But not discussing something that is going to happen will not stop it from happening. And at some point, someone is going to have to sort out your estate — regardless of how big or small it is. Here are some of the key issues that should be addressed:

WILLS Everybody should have a will, and people who are married and/or have dependent children are inexcusably foolish if they do not. There are significant issues that only a will can clarify. One of the biggest is who will take care of the people you love, and how? You may have told your best friend that he will be the guardian of your children if you and your spouse die in a plane crash, but unless you spelled out your wish in a will, there is no guarantee this will happen. If both parents die, it will be up to the state to decide, and they will chose based on family.

If you say this is what you wanted anyway, you’re missing the point. Which parents would you want to raise your children — yours or your spouse’s? Or if it is a sibling, do you care if your children go to the wealthy one in Seattle whom you always fought with or to the financially strapped but loving one in Memphis with two children of his own?

Some may argue that wills are expensive. But there are plenty of online sites to help write a legally binding one for little cost. Two popular destinations are RocketLawyer and LegalZoom.

If you are wondering what will happen to your money if you die without a will, go to mystatewill.com. It shows what happens to your assets in each state if you die without a will. The picture it paints can be scary and may convince the holdouts that paying a fee online or spending $1,000 for an actual lawyer to draft a basic will is well worth it.

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