Estate planning is a cornerstone of a strategic financial plan. While it often doesn’t take the same kind of precedence as saving for retirement or your child’s education, estate planning should not be overlooked when setting long-term financial goals.
An expert financial advisor is your best resource for sifting through the many decisions and details involved in estate planning. Professionals like Saddock Advisory can help you create a strategic financial plan that best benefits your loved ones.
If you are uncertain if you require estate planning or are unfamiliar with the basic building blocks of the process, the first step is to determine whether creating a detailed estate plan is necessary for your financial future.
Estate Planning Basics
What Constitutes An Estate?
It’s a common misconception that estate planning is only reserved for the extremely wealthy. However, this couldn’t be further from the truth. If you conduct an impromptu asset tally, you‘ll likely discover that you already have – and are building – a hefty estate. Ideally, this estate will one day be shared with your loved ones. Moreover, if you do an existential inventory you might find that you have strong opinions about what you want medical care to look like in the future. Or, specific legal directives you’d like your loved ones to follow.
As a preliminary matter, an “estate” is often thought to only encompass real estate or an investment portfolio. In practice, it includes personal property like vehicles, retirement accounts, savings accounts, life insurance policies, and the often overlooked assets that make up your everyday life.
Simply put, if you have any of the aforementioned assets and loved ones who depend on you and/or whom you want to take care of, you need to start building an estate plan.
Critical Components of an Estate Plan
An estate plan is more than just designating who will receive your assets. A smart and strategic financial plan will include the following details to ensure you and your loved ones are provided for:
- Will – a will is a vital document that will name an executor to carry out your wishes. A will also outlines how your assets will be distributed.
- Trust—A trust manages and cares for assets on behalf of your beneficiary or beneficiaries. Many different types of trusts can also lead to lower tax burdens and reduce future financial or legal burdens.
- Power of attorney – A power of attorney grants authority to your designee. Like an executor, this person can make legal decisions on your behalf and ensure your wishes are carried out.
- Healthcare directives – Your healthcare directives ensure that your medical-related wishes are followed. Ultimately, it provides guidance so that your loved ones don’t have to grapple with any ambiguity in taking legal measures or making medical decisions for you.
- Tax planning – The value of tax planning strategies cannot be overstated. Tax strategies will minimize any financial or legal headaches your loved ones may encounter when it’s time to distribute your assets.
Who Needs Estate Planning?
As stated, the list of people who need estate planning is more all-encompassing than many people realize. Accordingly, a sample of individuals who will benefit from smart estate planning includes the following:
- Young Professionals– whether you are building assets or thinking of starting a family, it is never too early to create a safety net for your children.
- Small Business Owners – Having an exit strategy or succession plan is crucial for small business owners. This kind of planning ensures your business legacy lasts for generations.
- Middle-Class Families – It is essential to protect your assets for your children and minimize their financial burdens. Remember that estate planning covers much more than end-of-life directives. It’s also an intelligent way to set financial goals for the years ahead, like planning for higher education.
- Retirees – Retirees especially benefit from estate planning. It enables them to decide how they want medical care, finances, and assets handled in the future.
It’s Never Too Early or Too Late to Start Estate Planning, and Saddock Advisory Can Help
Estate planning is a beneficial venture for virtually anyone. It’s especially important if you have loved ones and have worked hard to build your financial legacy.
But you need a professional and caring resource for estate planning. They will help you consider every detail—from medical decisions to tax strategies.
This is where Saddock Advisory shines. Reach out to our team of financial planning experts today to start the conversation about your long-term financial goals and wishes. With Saddock Advisory at your side, you can create peace of mind that your future and your loved ones’ futures are well protected.
