Many people tend to forget that estate planning is a two-part process.
Half of the documents are to provide instruction for distribution of your assets after your death. The other half outlines how to handle finances and medical care if you become disabled, either temporarily or permanently.
Everyone who’ll be leaving this world needs an estate plan, which can be a simple plan you complete yourself. Understanding what you have and what you need can be dealt with easily and effectively.
Recently, I was chatting with a young woman who had just finished college. When I mentioned the upcoming estate-planning class, her response was, “I have no assets.” Unfortunately, this misinformed statement is all too common. First of all, this young woman has a most important asset: her body and its well-being. If she were to experience unexpected surgery or coma, who is looking out for her medical interests? And, secondly, in the event of premature, unexpected death, having guidance about her preferences is amazingly comforting to survivors.
Regardless of marital status, net worth or age, women and men need to make informed decisions and arrangements now to protect themselves, their current partner (and former partner, if relevant), children and other loved ones in case of incapacity or death. Too often, women shrug it off to their spouses.
Here are some key reasons for why it is important to take care of your estate planning today.
If you don’t have a will (updated within at least the last five years) or the minimal advance directive documents, you risk leaving your family with nothing. Attending the upcoming planning classes with attorney and physician presentations is the perfect place to start. Beginning next week, Colorado State University Extension will present the series “Legally Secure Your Financial Future.”
Forty-six percent of all households are maintained by a single person. Of this, 11.6 million are single parents – 9.9 million (85 percent) are single mothers, and 1.7 million are single fathers. What arrangements have been made for the care of these kids in the event a parent is rendered temporarily unavailable or unexpectedly hospitalized?
Do you understand the difference between a living will and medical power of attorney? What about a health-care directive or an unfunded trust?
Many people choose to ignore creating these documents for various reasons – they find them unpleasant to contemplate, they can’t afford it or, even worse, they think that only older people or wealthy people need them. Young people mistakenly believe that this paperwork isn’t necessary until they reach old age.
Women live an average of 4.9 years longer than men. That means women need assets to last longer. It also means that wives are probably going to outlive their husbands, so they will likely inherit their husbands’ estates and will probably have the last word on final disposition of assets. Full-time working women earn 81.2 cents for each dollar a man earns and tend to work fewer years. Bottom line: Women earn less money to provide for a longer lifetime. A man is not a viable financial plan.
Asset-protection planning also benefits small businesses and professions with high litigation risks such as medicine, law and real estate.
firstname.lastname@example.org or 382-6461. Wendy Rice is family and consumer science agent for the La Plata County Extension Office.