The One Financial Plan Everyone Should Have

The One Financial Plan Everyone Should Have

( – To most people, financial planning means creating a budget, saving for emergencies, and building a retirement nest egg. Yet, one aspect of an individual’s financial life often seems to fall through the cracks because people don’t like to think about it — estate planning.

According to, only 33% of Americans have an estate plan or will, leaving the other 67% unprepared for the future. Sadly, if you don’t formulate a solid plan, the state you’re living in will decide what happens to your assets, and your heirs will likely pay hefty sums through probate.

The first step in the estate planning process is to obtain life, home, and auto insurance. Be sure the policies cover death expenses, so that’s one less thing your family has to consider. Also, get enough life insurance to cover any debts you have and replace your income for a certain time. Designate beneficiaries on all of your policies and assets so they go to the right people. 

Another piece of your estate planning should include a living will and a power of attorney. The living will provides instructions about your wishes regarding your health decisions if you become incapacitated, and a power of attorney (durable and medical) designates a person who will make your decisions for you in that case.

Finally, write a will and enumerate your last wishes as to who gets what possessions and what you want to happen with any minor children. Unfortunately, having a will won’t protect your heirs from the probate court. For that, you need to create a revocable or irrevocable trust. Each one protects your assets in different ways and allows your possessions to pass directly to your beneficiaries without interference from the court.

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