Estate planning might not be top of your priorities right now. Perhaps you feel you are too young to worry about it, or maybe you think you have nothing to pass on and will make one once you accrue some serious wealth in later life.
Assuming estate planning is all about what happens when you die is a massive mistake, but one that many people make. Estate planning can help you out while you are living as well as providing for your family when you die.
An estate plan looks after your health
At some point in life, you may have severe health problems. That could be due to crashing your motorcycle aged 21 or getting Alzheimer’s aged 79. Either way, injury or disease could leave you unable to make decisions for yourself, whether through being comatose or being incapable of making sound decisions.
Estate planning can do several things. You can specify what life-saving treatments you do or do not want. Or you can ensure someone has a health care power of attorney to make those decisions for you. You can also put a financial power of attorney in place to allow someone to access your money and pay the bills if you cannot.
You could also use your estate plan to ensure you can pay for health care if you need it in later life. For example, if you need to enter a residential care home in your 80s, it can soon drain your savings and leave you with nothing to pass to your family. If, however, you move your money via trusts and other methods early enough, you may be able to qualify for Medicare.
Understanding the full range of things that an estate plan can accomplish is crucial. Life can take unexpected twists, so the sooner you have a scheme in place, the better.