“If you fail to plan, you are planning to fail!”– Benjamin Franklin
Mr. Franklin’s words might be a little cold-hearted for some, but this is not the intention. By not making a plan, we set ourselves up for failure. This especially holds true when it comes to life planning.
For the young up-and-comer to the middle-aged blue collar worker, life planning is essential. It’s a way to protect yourself and your family from whatever curveballs are thrown your way. It doesn’t have to be a grand or complicated plan, but some sort of framework will help guide you as you grow older, and it will be of great use should you die unexpectedly or have a terrible accident.
With the internet having so many planning services available right at our fingertips, it’s never been easier to make a will, set up a deed, or determine how we want to save for the future. The most important ingredient is taking the time to put something together. Here are a few things to consider in your planning.
If you are married and have children, you should absolutely consider having life insurance.
Life insurance is a financial safety net that helps your family with the loss of your income should you die unexpectedly. Many employers offer free life-insurance that is equal to several months’ of your salary, but that is not enough if you have a mortgage and college tuition to pay for.
A Will or Trust
A will is an easy way to outline your wishes and determines what happens to your children, your property, and your assets. Wills can be drawn up quickly and at very little cost. You can use a lawyer, prepare one online, or some employers even offer free will services through partnerships with other companies.
If you have a lot of high-value assets, it’s worth considering a trust. The beauty of a trust is that it allows your beneficiaries to avoid the lengthy, complicated process of probate, a process that is almost always applied to a will. Probate is how the courts determine the validity of a will, and this process can take a fair bit of time, even with a modest estate.
Property or Assets
There are some ways to get around probate, but just as in life, there is no guarantee.
If you have specific designations on your bank accounts, retirement accounts, life insurance, or any other financial accounts, most likely these can be directly passed onto beneficiaries without the worry of probate.
For your car or home, be sure to have your spouse’s name added to the title or deed. This ensures the property automatically passes to them upon your death. If you are unmarried, consider using a transfer-on-death deed to allow your beneficiary to avoid the costly process of probate.
For people who have minor children or who are caretakers for an aging or disabled relative, it’s important to make a plan for guardianship upon your death. You can outline these preferences in a will or trust, and most of the time judges will follow your lead. A guardianship ensures that your children do not have to enter the foster system, and that your disabled or aging relative is not made a ward of the state.
There are so many other considerations to apply in life planning, but starting somewhere is the best way to get a feel for what you want to do. Once you have a plan, make sure to keep all your important documents in a safe place, and give copies to your beneficiaries or trusted advisors.