Estate planning is very important irrespective of your age and income. If you want to pass on your assets, it is paramount to understand why estate planning should be done. Your estate planning will be helpful for your loved ones. The misconception about estate planning is that it is meant for elderly and only for rich. If you go through the following points, you will realize that it is meant for everyone and how it should be done-
For young adults: This category includes the unmarried youth. Usually, estate planning could be last thing on the minds of the young people, but that’s not a right approach. The wealth or assets are not sufficient to lead towards making any plans when one is young. But your loved ones deserve a proper ascertainment of assets and passing of them in a lawful manner. Though you could be young, there might be situations where you become medically incapable of taking care of your assets. In that case it would be appropriate to give your parents the right to manage the assets through a Power of Attorney. To begin with, planning at your young age could be a pioneering step towards your future. Once you get involved in planning, you will better know how to manage your monetary matters.
For families: Getting married is another step of your life where you are supposed to take care of your assets for you and your partner. Later in life, your children too will be added. Everyone has some goals in life. And marriage is like consolidating your goals and assets with your partner. To protect the interests of your children, Private Family Trusts too are often resorted to.
Appointing guardians through will is necessary once a child is born in the family. Because of the guardianship the financial interest and upbringing of the child is secured. In absence of a guardian, the matter will be left to be decided by the court and the person who will be appointed to take of your child, might not be the best suitable person to serve the purpose. Make a stage wise plan where your spouse shall be the first beneficiary followed by the children to prevent misuse of wealth.
For elderly in their golden years: All your hard-earned money, assets and wealth should reach your children. A well-made plan shall leave you free from worries in case of your death. Rescheduling your plan will further ensure that it is updated from time to time at each level of life and the best possible allocation is made of your wealth. If this is not done, it might involve many administrative difficulties on the part of the family members. Discuss your plans with your loved ones to effectively make them understand your motives and minimize the chances of conflict of interest.
If the objective behind the estate planning is well understood in your young age itself, it will help you carry out changes whenever required with much ease at different levels of your life. Wealth will be best distributed among the legal heirs as per your goals without endangering anybody’s interests.
Smrutirekha Bhoi