3. Your stage in life will impact your family estate plan
When it comes to creating your estate plan, simply start where you are and add to the plan over time.
For example, a single young adult starting out can benefit from a healthcare directive and a power of attorney over assets and financial accounts in the event of medical incapacity. Your healthcare directive ensures that someone else (i.e., parents) can make medical decisions on your behalf if you are unable to make those decisions yourself. Adding a power of attorney for assets and financial accounts can ensure your bills and taxes are paid and your assets are managed if you are incapacitated.
When you start acquiring more assets, get married, or have a growing family, that’s when a will and/or a trust could come into play. When minor children are involved, having guardianship provisions in place is critical to their care and well-being if you are unable to be there for them.
4. Consider your beneficiaries
When it comes to choosing beneficiaries for your assets, different families have different values or beliefs that may influence these decisions. A primary beneficiary usually includes a spouse first, then children and other family members. A charity or cause you care about can also be selected as a beneficiary.
As you develop your family estate plan, it’s important to consider the needs and expectations of all parties involved and how competing interests might be balanced. While an objective in creating an estate plan may be to treat everyone “equitably,” that does not mean everyone needs to be treated “equally.”
For example, if you run a family business, you might leave it to children who work in the business, while providing other assets to those who don’t. In this instance, everyone can expect to receive an equitable interest in the family inheritance but not necessarily an equal interest.
Likewise, additional support may be needed for a child who requires extra financial help while protecting the inheritance of others. Conversations with family members and an estate planning professional can help you ease tensions and make decisions that are in everyone’s best interest.