Estate planning can seem overwhelming due to the multitude of options available. This is one of the reasons that so many people do not have one yet.
However, as with most things, once you get started you’ll find it not as difficult as you thought. Really, it comes down to three main things:
Planning for ill health in later life
There’s a good chance you will need extensive medical care when you are older. Your estate plan can set out any preferences you have regarding treatment and gives someone the medical power of attorney to make choices on your behalf.
It should also consider how the treatment will be paid for. Medicare is one method, but it’s only free if your wealth is below a certain threshold. Therefore, one thing many do in their estate plan is take steps to ensure their wealth remains below that threshold. Otherwise, you could find Medicare takes all your assets to pay for your care, leaving you little to live on or pass on to your family when you die.
Note that the law also allows Medicare providers to claim back the cost of your treatment by seeking any assets you recently transferred to family or trusts. So you need to execute your plan well ahead of time to avoid this lookback period.
Passing on your wealth
You can use your estate plan to set out who gets what when you die. You might even want to pass on some assets earlier to avoid taxes.
Ensuring life continues without you
Assigning someone power of attorney means they can step in if you are too ill to carry out crucial tasks or die. Examples could include paying the mortgage or signing legal documents. This reduces the amount of disruption that your ill health or death causes to your family who will already have enough on their plate caring for or mourning you.
Those are the basics of estate planning and with appropriate help, you may find it much easier than you first thought.