Estate planning remains one of the most misunderstood areas of planning. Over the years, I’ve met with people who “only needed a financial plan, not an estate plan” or “didn’t need a financial plan, just some help with estate planning.” I’ve also met with people who labeled themselves too young (or too old) to engage in estate planning. What they were all missing is that estate planning is an integral part of a comprehensive financial plan, not something that sits outside of it.
That’s because estate planning is part of life planning. It’s about defining and living out your legacy during your lifetime, enabling you to enjoy the impact it has on the people and organizations you support; ensuring loved ones who depend on your income are protected in the event of your incapacity or death; and ensuring your own wishes and preferences are communicated and can be met should you require long-term care, among other goals. It helps to answer important questions, including: Who will have the legal authority to act on your behalf if you’re unable to do so during your lifetime, whether that’s managing your assets or important healthcare decisions? And who is going to be tasked with making sure it happens?
To help clarify the role of estate planning in the financial planning process, it’s important to debunk some of the most common myths, beginning with: Who needs an estate plan?