Estate planning is the act of preparing for the transfer of a person’s wealth and assets after his or her death. Though the definition is quite broad, one particular misconception that has been attributed to estate planning is that it is only an activity that people who are rich should consider. The vast majority of people who don’t opt for estate planning always cite the reason of not having a high enough net worth for it to be necessary. But they couldn’t be more wrong! Estate planning is for everyone; any asset or amount you leave behind can be extremely significant for your loved ones. In that sense, to reiterate the need for everyone to think about estate planning, regardless of how much wealth you possess, here are some important points to consider:

• Estate planning ensures that your assets reach their right place:

Since the number of homeowners in the middle class population is increasing constantly, and investment in financial assets like mutual funds, shares, fixed deposit – is becoming more prevalent, the need for estate planning is even more pressing. If you don’t have an estate plan, some of your assets might end up in the wrong hands – by going to several unintended beneficiaries, after your demise. In that case then, designating heirs to your assets is the primary component of estate planning, regardless of how high your net worth is or how many assets you own – which includes things of both monetary and sentimental value. Additionally, writing a will makes the transfer process extremely smooth and easy – especially at a time when your family is in emotional turmoil. You should consider making a will even if you have just one heir.

• It is essential for families with young children:

You may not actually die young, but in order to plan for all contingencies, families with young children need to ensure that their kids are looked after in the event that both parents die. Estate planning includes the naming of a legal guardian for your children in case such a contingency should ever occur. This is extremely important, as otherwise, the care of your children might fall under the purview of someone you don’t approve. 

• It eliminates the possibility of a family squabble:

It is not uncommon that when a wealthy individual dies, their family fights over the estate they leave behind. In most cases, people usually try to find any reason to argue their claim of a larger share. Through estate planning, by meticulously distributing all your assets, you can do away with all these familial squabbles and possible legal battles. Further if you’ve had more than one marriage, and children with more than one spouse, estate planning should be a priority for you. This can help you put an end to conflict before it even begins. 

• You may overlook assets of significant value:

From naming your beneficiaries, to ascertaining values of family heirlooms that you thought were useless – estate planning involves several processes that help you identify value in things that you generally overlook. Reviewing your estate plan at different intervals is a great way to organise your finances, and remain up to date on a list of all the assets that you own. However, as the number of assets you own increases over time, the processes involved in estate planning can become extremely complex, and can also include several legal formalities. So, in order to be more efficient, it is advisable that you work with a financial planner, when drawing out your plan. 

Making the mistake of putting away estate planning is something that can seriously affect the well being of your family; the need for estate planning becomes even more pressing if you are the sole breadwinner. The bottom line is that, if you want your assets and your loved ones protected when you can no longer do it, you will need an estate plan. Without proper planning, everything that you have spent your whole lifetime building could be lost in the blink of an eye.