Estate planning allows you to decide how your assets should be distributed when you die, says CBS Boston’s article, “The Boomers’ Kids: Estate Planning.”
Remember, for those of you who are under 40, dying isn’t a just phenomenon that occurs only to old people. Unfortunately, people die at all ages, and many young people think of this as something very far off in their futures. As a result, it can be an obstacle to completing this last piece of a financial plan.
If you chose to not sign a will, the state will make one for you based on the state’s probate laws. These laws stipulate who will get your assets when you die. If you’re married with young children and both parents die, the state will determine who will be the children’s guardian.
As you run through the scenarios in your mind, this might be just enough impetus to get you moving on your will. Do you really want to leave it to your cousin Helga and her goofy husband to rear your kids? If there is a sizeable life insurance policy to cash out, you can bet she’ll jump at the chance, even though you shudder to think of your kids in her care. Draft your will with a guardianship provision to avoid the chance of her getting that opportunity.
Your estate plan does not need to be complex, fancy, or expensive. Begin with that all-important will and designate an executor/executrix to carry out your wishes and distribute your assets. In your will, you should name a guardian, if you do have minor children. Speak with the person you’re considering to rear your children and ask them if they would take on that responsibility. Be sure that you know their values and their level of patience.
You need a Durable Power of Attorney while you’re alive, which lets you designate someone to act on your behalf legally and financially, if you can’t. A Health Care Proxy allows you to choose a person to make medical decisions for you, if you’re unable. You should also talk with the individual you’ve asked to be your proxy about how you feel about death, dying, and life support. Make sure that they understand that this is about you—not about what they think is right.
Reference: CBS Boston (June 9, 2017) “The Boomers’ Kids: Estate Planning”