The Benefits of Estate Planning

19
June

When people hear the term “estate planning,” they often think of the kinds of arrangements that wealthy people make when they are trying to find ways to make sure that their abundant wealth stays in the family. The truth is that you do not need to have a private club membership to benefit from estate planning. There are several aspects to estate planning that can help you to make sure that your family is taken care of and that your plans for your family’s future are taken care of after you have passed away.

- Your Possessions

You spend a lifetime accumulating possessions that mean a great deal to you. Over time, your possessions come to be identified with your personality. If you collect items such as art or movie props, then your collection may even build up significant financial value.

When you are alive, you enjoy your possessions and you also hope that your family enjoys them as well. You teach your children to respect valuable possessions, and your kids may even start to share the same passion for your collections that you have. When you have passed on, you want to make sure that your possessions are cared for and that they wind up with the people that you know will appreciate them.

Part of estate planning is making sure that the possessions you have spent a lifetime collecting wind up where you want them to go. If you want to donate some to a local museum, then those wishes are made part of your estate planning. It will give you peace of mind to know that the things you loved when you were alive will be appreciated when you are gone.

- Your Debts

When people pass away, their debts are passed on to the next of kin. As you can imagine, that is not something that your next of kin would probably appreciate. This is where financial planning becomes an important part of estate planning. Many people feel that they are doing something great for their family when they get a life insurance policy worth $50,000. But when they leave behind $60,000 in debt, then that policy helps but is not the answer.

As you are doing your estate planning with a financial professional, consider debts you have and make allowances for them with insurance. These debts include a mortgage, car payments, personal loans and credit card debt.

- Your Family’s Future

Parents spend a great deal of time trying to provide for their children’s future. Spouses worry about how their significant other will survive with only one income if something were to happen. That is why life insurance is a critical part of estate planning.

A whole life policy is a life insurance policy with an investment portion to it. As you pay your premiums, the investment grows and can be added to the death benefit when you pass away.

Term life insurance is insurance that is only in effect for a specific period and has no investment portion. Term life insurance is often used to protect investments such as retirement planning and children’s college funds as part of an estate planning program.

Estate planning is not reserved for the incredibly wealthy. It is something that anyone with a family needs to check into. If you are making plans for your family’s future, then you want to make sure that those plans are achieved even if something were to happen to you. It is also important to make sure that your family is able to retain your possessions when you pass away. A good estate planning program will help you to achieve all of those goals.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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