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What Kind of Estate Plan is
Right for You?
Is your estate plan in good shape? Here's what to consider.
Lots of Americans haven't made even a simple will, to
say nothing of a more comprehensive plan to avoid probate or save on estate taxes. And
even those who have thought about what should happen to their property when they
eventually shuffle off to Nirvana haven't updated their plan in many years. We're not
going to nag, but we are going to chime in with a few suggestions as to what your estate
plan should look like. Oh yes, in case you're new to this area, estate planning is simply
a fancy term for the process of arranging for what will happen to your property (estate)
if a particularly large and lethal brick falls on your head.
Depending on your age, health, wealth and innate level of caution, you may not need to do
much at all in the way of estate planning. And even if you do decide you need a will or a
trust, you probably won't need a lawyer. Especially if you aren't dripping with Picassos
or fat investment accounts, it is easy and safe to prepare most basic estate planning
documents yourself. Just learn what you're doing by using good self-help materials.
We've sorted our tips into broad categories of family situation and age. As they say,
check all that apply. But keep in mind that age is an imprecise proxy for life expectancy,
which is affected by all sorts of other factors--heavy smoking while participating in
extreme sports and driving a motorcycle, for example. It's up to you to add or subtract a
few years, based on your health and lifestyle.
You're 25 and Single
What are you doing reading about estate planning? You're supposed to be surfing the Net or
dancing until dawn. But you might as well keep reading; this won't take long.
At your age, there's not much point in putting a lot of energy into estate planning.
Unless your lifestyle is unusually risky or you have a serious illness, you're very
unlikely to die for a long, long time.
If you're an uncommonly rich 25-year-old, though, write a will. (Bricks can fall on
anyone.) That way you can leave your possessions to any recipient you choose--your
boyfriend, your favorite cause, the nephew who thinks you're totally cool. If you don't
write a will, whatever wealth you leave behind will probably go to your parents. Think
about it.
You're Paired Up, But Not Married
If you've got a life partner but no marriage certificate, a will is almost a must-have
document. Without a will, state law will dictate where your property goes after your
death, and no state gives anything to an unmarried partner. Instead, your closest
relatives will inherit everything.
Other options to make sure that your partner isn't left out in the cold after your death
is to own big-ticket items, such as houses and cars, together in "joint tenancy"
with right of survivorship. Then, when one of you dies, the survivor will automatically
own 100% of the property.
You Have Young Children
Having children complicates life--but then, you already know that. Estate planning is no
exception. Here's what to think about.
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