Like most people you likely engage in some type of financial planning. You also likely understand the importance of having a well thought out estate plan in place. What you may not know is that the two should be combined. By including financial planning in your overall estate plan you maximize the benefits of both financial and estate planning. Moreover, there is an obvious connection between financial planning and estate planning that should be addressed and that can be addressed by including a financial planning component in your estate plan.
What Should Be Included in Financial Planning?
Hopefully, you began your financial planning early on in life. The early you begin financial planning the more you will benefit from that planning. Financial planning typically included both short-term and long-term goals. Your short term goals might include things like saving up for a down payment on a house or paying off credit card debt. Your long-term financial planning goals are probably focused more on things such as putting children through college, saving for your retirement, leaving a legacy for your children and grandchildren, and as part of your financial planning, you should have a good idea of what it costs to support you and your family now and what you think it will cost you and your spouse to live comfortably during your retirement years.
What Should Be Included in Estate Planning?
When most people think of estate planning the first thing they think about is how to distribute their estate assets when they are gone, usually through the terms of a Last Will and Testament. A comprehensive estate plan, however, can – and should – do much more than just provide a roadmap for the division of your assets when you are gone. Estate planning can also help grow the assets you have now, protect you and your loved ones in the event of your incapacity, and provide for your loved ones after you are gone. Most of these estate planning goals involve your finances which is one reason why financial planning should also be part of your estate plan.
The Benefits of Including Financial Planning in Your Estate Plan
Because much of your estate planning goals include assets and finances, it only makes sense to include financial planning within your estate plan. It would be difficult, for example, to try and include a retirement planning component in your estate plan without having a good idea of the amount of money you plan to have available for your retirement. That information, of course, can be found in your financial plan. Conversely, it would be difficult to know how much money you need to have in savings and/or investments for emergencies without also knowing what estate planning provisions you have in place for emergencies. The bottom line is that while you could have financial planning without estate plan and vice versa, it doesn’t make sense to do so. Moreover, the benefits of putting the two together in one plan are considerable.
Your Financial Coach and Your Estate Planning Attorney?
Now that you see the benefit of having your financial planning and estate planning under the same proverbial roof, who should take care of the planning, your financial coach or your estate planning attorney? Ideally, you should not have to pick one or the other. If the two are able to work together on your overall estate plan you will benefit by creating much more comprehensive estate plan in the end.
For more information, please join us for an upcoming FREE seminar. In addition, if you have additional questions about financial planning and/or estate planning, contact the experienced Grand Forks estate planning attorneys at German Law Group by calling 701-738-0060 to schedule an appointment.