When you think of October, you might think of witches, warlocks, pumpkins, and cooler weather. However, what you may not know is that October is also Financial Planning Month, during which you can make a commitment to getting your affairs in order and tidying up your finances.
You can dig your own financial grave by doing nothing. You don’t even have to pick up your metaphorical shovel. Simply sit back and make no estate plan, and you will have dug your own financial grave, along with your family’s. In this article, we’ll talk about how you can commit to financial peace this October.
Estate Planning: The Horror Movie Antidote
The real monsters are taxes, creditors, and the government, and they all are lurking at probate court. If you die without an estate plan, your case will go to probate court. Probate will pay off your creditors and saddle your family with estate taxes in the event that they distribute your property to them. The process is lengthy, time-consuming, and expensive. October may be the month for scary surprises, but let’s avoid the unwelcome surprise that is your family having to go to probate court.
Estate planning will safeguard you against the horrors of probate court. Here is a brief overview of estate planning:
What to Know about Estate Planning
An estate plan allows you to decide where your assets will be distributed. It also gives directives on how to manage your care and finances if you are incapacitated. Here are the main documents included in an estate plan (though by no means is this list exhaustive).
- A living will. If you become incapacitated, chances are you don’t want the state to make your decisions for you. The government might not make the right choice when it comes to pulling the plug or not. A living will gives the hospital healthcare directives and information on your care that doctors can follow. Even if you are unable to give these directions yourself, the living will tells them how to manage your care.
- A financial power of attorney. If incapacitated, you will also want to ensure that your finances are managed appropriately. Appointing a financial power of attorney means you can pick someone you trust and know is responsible to be in charge of your money when you are unable to do so.
- A power of attorney for healthcare. A power of attorney for healthcare will also help you make healthcare decisions when you are unable. If your living will doesn’t cover something, this person (who you also pick), will be assist in making these decisions.
While estate planning isn’t the most Halloween-ish topic to discuss, it certainly is spooky to think about what happens if you don’t have a plan. Hopefully, this brief overview helped you to get a sense of what estate planning is and the many benefits that come with it.