The word ‘estate’ brings about imageries of the uber rich - mansions as houses, super cars, private jets and yachts.
But in reality, all of us has an estate. Fair enough, yours might be smaller than the rich people but hey, over the years you would have accumulated a rather significant amount. Be it your own house, retirement funds, cash, vintage collections, a car or a Birkin, all these personal assets are your estate. In the event that you passed on, how can you ensure that this estate can be passed along to your loved ones to ensure that they can continue to lead a comfortable lifestyle?
What Is In Your Estate?
Death is not the most interesting topic to talk about. However, it is crucial that you start making decisions about your assets while you are still alive. Explicitly stating your wishes for who gets what after your demise will make things a lot easier for your loved ones. Your estate may include:
● Real estate
● Businesses (if any)
● Money in banks
● Money in any investment accounts, insurance payouts
● Jewelries, art collectibles or any other vintage collections
And this brings us to ...
Creating a Will
Whether you are single and barely has any assets or married with multiple kids, you need to have a will in place. There is no such thing as being too young to to have a will. A will serves as your ‘voice’ when you are no longer around. It instructs the lawyer or executor on how you would like your assets to be divided - be it your cars, money in your investment accounts, businesses etc. It is never a bad idea to hire a lawyer to help you dot your i’s and cross your t’s, to prevent complications from arising in the future. We have all watched enough Hong Kong dramas to know what happens when things go wrong.
Getting Life Insurance In Place
You have probably heard this umpteen times, but life insurance is indeed a financial safety net for your family members. A more affordable option will be term insurance. For example, if you are a healthy 25 year old millenial, you can get a 20 year, $500,000 term coverage for $42 per month, which is less than what you would spend on a meal in a restaurant with your family.
The payout from this insurance can be used by your loved ones to help them pay for anything, as shown below, to allow them to continue life as per normal:
● Phone bills
● School fees
If you had correctly designated your beneficiaries/dependents previously, these payout will be given to them without any hiccups.
Plan for the future
While the idea that you have an estate currently might feel a little farfetched, putting in place a plan will definitely reduce future headaches when times get tough. The more assets you owned during your lifetime, the more complicated it might be for your dependents when you are no longer around. Setting up a will can ensure that you bequeath your stuff to the person you want it to go to and prevent any arguments or confusion among your heirs.