If you are relatively young and in good health, thinking about someone one day inheriting your money might seem like a very distant future. Similarly, it almost might not seem like a useful effort, if you presently don’t have much money. For both situations, I’ll say this: wealth doesn’t just happen.
It takes planning and preparation for the worst. Lots of people fail to become wealthy because they aren’t really planning for it. Others lose the money they have made because they fail to prepare for uncertainty. In both cases, being over prepared is better than being unprepared. And estate planning is part of those considerations.
Let’s say you don’t presently have much money, but you want to earn and accumulate more. You should start with financial planning. Financial planning experts know that without a clear plan for your future, you’ll never become wealthy, it’s a hard fact.
In essence, if working out the details of a solid investment strategy, increasing your income, and planning out the eventual disbursement of your estate is too much for you, so too probably is wealth itself.
So if you want to get money, start planning for how you’ll do it, in detail. Like a friend of mine always asks me, “Are you Prepared to have Money?”
Let’s say you’re well on your way to acquiring meaningful wealth and want to determine how much your life is worth. Planning ahead for what’ll happen to your wealth when you are no longer around is equal, if not more, important.
This is because not everybody passes on their wealth at a very old age. Unfortunately, there are many common causes of death for young people, due to an accident and sudden illness.
For a situation like this, it’s not only important to have life insurance, particularly if you have dependents, it’s also important to lay out a plan with the people you love and trust the most. I also recommend that everyone over the age of 30 with any sort of wealth or property should have a will, if only for the security of the people you love.
Your will can be worked out with a lawyer, and the insurance can be worked out with an insurance agent. You can also do it online. In fact, more you look and shop around, cheaper the cost of insurance be.
The heir inheritance plan you develop with your family for disbursement of your estate is a more informal affair. Making this plan needn’t be complex or time-consuming. Think of it like a fire drill for your money.
It’s perfectly fine to keep on changing your will based on newer circumstances. But it is not so nice to live life without a will, especially if you have more than one heir in your mind. You should ensure proper distribution among your loved ones.
When you have this conversation, figure out how important things like house and car payments would continue to be paid if you and your income were to be out of the picture. Create a realistic overview of an ongoing budget and debt-handling schedule.
Create an emergency savings account, and make sure that your partner or dependents know how and when to use that money. Make it understood how you want certain aspects of your wealth and property to be used, given away, or sold. Basically, just think of everything financial that you presently control in your life.
If you want to make sure that it continues running smoothly, no matter what happens to you, have this plan worked out with your family.