Most people are unsure about the need for estate planning. The common misconception is that estate planning is for the rich. Another reason people shy away from estate planning is that they feel that estate planning is only about what happens to your money when you die. Who wants to think about death?
There was a time when the major focus of estate planning was on avoiding probate. Avoiding probate and taxes is still a viable function of estate planning but as the country’s population gets older and lives longer the focus of estate planning has shifted somewhat to making sure you have enough income to live on when you retire.
When thinking about estate planning you should consider that, you may have more assets than you realize. Stocks, bonds, CD, 401K’s, bank accounts, IRA’s insurance policies, cars, your home, are all assets of value. Planning to protect them and increase them for retirement living or for children if you die young should begin when you are young. They should be maintained and adjusted as you grow older and your priorities change.
Estate planning decisions can be thrown at you as soon as you get that first real job with good benefits. Many employers offer stock options, 401k’s, group life insurance as well as other types of investment opportunities as part of your benefits package. Knowing the basics about estate planning will at least help you determine which of these offers from your employer you wish to take advantage. Remember there are people who took stock options from UPS when they were a privately traded company in the company’s early years who were able to retire as millionaires twenty years later. What you do not know about the need for estate planning can hurt you.
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