Why Does Estate Planning Matter in Annual Financial Goal Setting?
Setting financial goals annually is an essential part of long-term planning to achieve milestones and create a sense of financial stability and security. Combining these tasks provides the benefit of aligning financial goals with estate planning objectives that provide economic protection for individuals and their loved ones, while simultaneously assuring that wishes are carried out properly after one passes.
Having a comprehensive strategy that incorporates both financial goal-setting and estate-planning elements can protect your assets while preserving your legacy for future generations.
This article approaches practical elements of estate planning from the perspective of providing an annual guide to financial goals.
Understanding Estate Planning
The purpose of estate planning is to outline instructions for how you want certain matters handled if you become incapacitated or you become deceased. An estate plan can address several issues regarding wills, trusts, powers of attorney, guardianship for minor children, and healthcare initiatives.
Without an estate plan in place, you will have little to no say about how minor children are cared for or how the assets you’ve worked a lifetime to accumulate will be distributed. Having a will is one of the tools an estate planning attorney will recommend, though it is often not comprehensive.
At The TGQ Law Firm, we recommend supplementing a will with trusts and other estate planning tools.
The Importance of Regular Review
It’s a common misconception that estate planning is a “one-and-done” type of task, and while it’s not pleasant to think about passing away or becoming incapacitated, it’s important to realize that circumstances can change over the years.
For this reason, it’s recommended to review both your estate plan and your financial goals annually, and then update accordingly.
To put things into perspective, here’s a brief list of what could change each year that might necessitate an update to your overall estate plan:
- Changes in personal circumstances, such as marriage, divorce, birth of a child, a death in the family, a career change, or relocating to a new city
- Changing market or economic conditions
- Updates to laws or regulations that affect tax rates, healthcare, etc.
- A rise or drop in the performance of an investment portfolio
- A change in health status
- Shifting values in terms of charitable giving
Addressing Digital Assets and Insurance Policies
As technology has progressed, digital assets have become an integral part of financial and estate planning. Digital property can include everything from a blog created as a side hustle to digital photographs and music. Like tangible assets, digital assets also qualify for legal protection and can be part of a trust or have protection under a power of attorney.
A somewhat related concept to digital assets in the area of estate planning is insurance policies. Typically, life insurance, disability insurance, long-term care insurance, and property insurance policies should be reviewed annually, though it can also be prudent to review health insurance, too.
Specifically, you should reevaluate coverage options, premiums, benefits, and other financial aspects of your plan to ensure they are still in alignment with your overarching estate planning needs.
Funeral and Burial Wishes
Clearly stating your funeral and burial wishes as part of your estate plan is essential because it ensures that your intentions are aligned with cost considerations and your overall financial values. Again, your preferences may change as you age, so it’s highly recommended to take a closer look at instructions when conducting regular reviews of your estate plan.
By having a clear, up-to-date plan regarding your funeral and burial wishes, you can take any guesswork out of what your surviving family members should do. Remember, they are in the grieving process, and having precise, specific instructions can reduce potential conflicts and alleviate stress for your loved ones.
Secure Your Future With The TGQ Law Firm: Your Guide To Achieving Financial Goals
A robust estate plan has the potential to protect financial assets and achieve financial milestones, all while providing a clear direction for the distribution of your assets among your heirs upon your passing. Estate planning is more than about planning for the end of life; it can also be instrumental in helping you achieve your long-term financial goals.
For guidance from an experienced estate planning attorney in Ann Arbor, contact The TGQ Law Firm at (734) 707-3232 for a consultation.
Disclaimer: This article is not intended to be legal advice. Everyone’s situation is different and legal advice is only properly given after having reviewed your specific situation.
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