Isn’t Contingency Planning only for the rich?
In a word, no. Contingency Planning allows you or anyone to implement certain tools now to ensure that your concerns and goals are fulfilled after you die. Your objective may be to simply make sure that your loved ones are provided for. Or you may have more complex goals, such as avoiding probate or reducing estate taxes.
Contingency planning can be as simple as implementing a will (the cornerstone of any estate plan) and purchasing life insurance, or as complicated as executing trusts and exploring other sophisticated tax and estate planning techniques. Therefore, estate planning is important whether you are wealthy or whether you have only a small estate. In fact, estate planning may be more important if you have a smaller estate because final expenses will have a greater impact on your estate. Wasting even a single asset may cause your loved ones to suffer from lack of financial resources.
There are five Contingency planning documents you may need, regardless of your age, health, or wealth:
- Durable power of attorney
- Advanced medical directives
- Letter of instruction
- Living trust
The last document, a living trust, isn’t always necessary, but it’s included here because it’s a vital component of many contingency plans.
*LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.