Estate planning isn't just for "old" people. It's never too early to start thinking about your plans, especially if you already have a family. We'll give you five great reasons why young(er) Nevada residents, specifically those under 40, should begin getting their personal affairs in order, right now. It may sound clichè, but you truly never know what situations you could find yourself in- the sooner you start planning, the more prepared you will be for the unexpected.
Here are five simple ways to approach the estate planning process:
1. Don't let your net worth deter you from creating a plan.
Your decision to begin estate planning shouldn't be determined by your level of wealth. It may seem odd for those who don't have many assets to begin the process, but "starting now" applies to everyone, even those who only have debt. Creating an estate plan ensures that your beneficiaries, especially financially dependent individuals- your children, for example- are afforded as much as possible. These plans exist to allow individuals the opportunity to determine how their assets will be handled upon their death. If you don't have many assets, it may be even more important to plan, so as to make sure the assets you do have make it to the destination you decided would be most appropriate while drafting your plan.
2. Discuss estate planning with your friends and family before you start the process.
Have a conversation with your family and friends about what you would like to happen with your assets after you die, even if you are, say, 35-years-old and in perfect health. It's necessary to have the "what if" talk. Financial transfers tend to go much more smoothly when the beneficiaries are aware of the plan beforehand. Discussing the distribution of your assets while you're still living gives you the opportunity to explain what items you left to who and why. Cluing your loved ones in on the rationale behind your decisions before you begin drafting your estate plan helps prevent additional unnecessary emotional turmoil upon your death, allowing your family to focus on grieving rather than arguing over who gets the dining room set or jewelry.
3. Focus on the basic estate plan components.
What are the basic parts of an estate plan? The following estate planning documents should be established at the very start of the planning process: Life insurance, will, living will and durable power of attorney.
Life insurance can replace lost earnings, which is especially useful for younger people who haven't necessarily had the chance to put enough funds into their savings and/or retirement accounts before an untimely death. The younger you are when you take out a life insurance policy, the more likely you are to be eligible for reduced rates.
A will should detail how you would like your assets to be assigned to your beneficiaries following your death. If you have children, it's important to designate child guardians or financial account trustees. Simply put, the more details you include in your will, the better.
Appointing a durable power of attorney, or trustee, is helpful if you have young children, as this trustee will have the power to manage the distribution of assets, and take care of practical things, such as selling your home and accessing your bank account.
In the event you become severely injured or disabled and are unable to make decisions for yourself, a power of attorney (slightly different than a durable POA) is responsible for making important health care decisions on your behalf. Of course, this individual should also be a trusted family member or friend that you will appoint in your living will.
4. Contact a knowledgeable Nevada estate planning attorney.
The attorneys at Stone Law Offices in Nevada have more than 20 years of experience crafting personalized, “client-centered” estate plans that are legally sound and tax efficient. Our law office takes pride in our ability to incorporate the client’s financial and social values and aspirations into their plan. We have a shared goal with our clients to establish a meaningful legacy during the client’s lifetime and beyond.
5. Continue to review your plan on a regular basis.
Your estate plan shouldn't be something you lock away and never touch again. It's wise to review your documents after each significant life event to establish that all aspects of your plan still make sense and reflect your present situation as well as future wishes. Be sure to stay current on your insurance policies and investments, as they both factor into your estate plan and can change along with shifts in the economy.