Estate Planning Isn’t Just for the Wealthy

John Clouden
Senior Vice President

A common misconception is that estate planning is only for ‘the wealthy’. Although it is important for people who have built some wealth to plan to preserve it; estate planning should be done by everyone. No matter how much you have in assets, there is one thing in common for everyone, you can’t take it with you when you die.

Estate planning is for everyone

An estate encompasses everything you own. Your car, home, investments, savings and checking accounts and personal possessions are all considered a part of your estate. So estate planning is essentially deciding where you want your estate to go when you’re no longer here or when you end up having to go into a nursing home. Additionally, it ensures that those who are benefiting from the estate receive the largest distribution possible with a minimum amount of delay. Without a plan, your assets will be controlled by others through the court of law, not by your family or loved ones.

Different levels of estate planning

If you don’t think you can afford a complex estate plan now, start with what you can afford. Then, let your planning develop and expand as your needs change and your financial situation improves.

Will

For a young family or single adult who has simple finances and wishes, a will might be a good starting point. This is the most common estate planning instrument. A will designates who you want to inherit your property and if you’re a parent of a minor it will name a guardian to care for them should something happen to you and the other parent. Typically, a will can cost as low as $150 depending on the complexity of your needs. One thing to know is all wills must pass through probate, which may be a lengthy and expensive process.

Trust

A trust is an arrangement by which a trustee distributes payments or property to a beneficiary according to the terms of the trust. A beneficiary may be a family member, a friend or a charity. A trust created by a will transfers property to the trustee at the time of the individual’s death. If you hold your property in a trust, your beneficiaries won’t have to go through probate court; bypassing a time-consuming and expensive process.

Living Will & Health Care Proxy

Having documentation for health care ensures that an individual’s medical wishes will be carried out when they are unable to make medical decisions for themselves. A living will establishes the individual’s personal decisions regarding their health at the end of their lives. A Health Care Proxy will give an individual the control of all health care decisions leading up to the individual’s death.

Financial Power of Attorney

With a durable power of attorney for finances, you can give a trusted person authority to handle your finances and property if you become incapacitated and unable to handle your own affairs. This will allow the appointed person (known as your “agent”) to pay bills, manage investments and make key financial decisions. Your agent is obligated to act in your best financial interest at all times while being in accordance with your wishes.

Estate planning is an ongoing process and shouldn’t be treated as a one-time event. As your family and financial situation changes over your lifetime, your plan should be reviewed and updated. If you would like a complimentary review of your plan, call our office to set up an appointment. For more information on estate planning, listen to my interview with Clay Moden on 106.5FM WYRK.

WEEKLY SEGMENT ON WYRK

You can catch our weekly Plan.Protect.Invest. segment live on WYRK 106.5FM at 7:20am every Wednesday. Each week we will have a Sgroi Financial planner on with Clay Moden and the WYRK morning show to discuss financial topics to educate and help their listeners.
Since 1971, Sgroi Financial has proudly served Buffalo, NY and the Western New York community from our West Seneca location.

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