There are many different component parts to a well rounded and comprehensive estate plan, and one very fundamental element to consider early on as you engage in long term planning is life insurance. When you are just starting out in life as a young adult, you may feel as though estate planning is not relevant to you because you have not yet accumulated significant assets. This is understandable, but life insurance is something that you can put in place as the first step toward building your legacy. When you begin your career the benefits that your company offers are very likely to include life insurance and a 401(k) program, and when you enroll in these you have begun the process of long term planning.
Life insurance can provide young single people with a sense of security knowing that their last expenses will be covered in the unlikely event of their death, but it is even more important for families. Most young families today depend on the combined incomes of both partners to maintain their quality of life, so it important to have a safety net in place. Life insurance is the ideal income replacement vehicle for people who have not yet amassed a significant nest egg, serving as a safety net that leaves your family prepared to respond to any eventuality from a financial standpoint.
For those who have reached the latter stages of life, insurance policies can address costs associated with estate administration and funerary obligations. Life insurance is also a useful tool for inheritance balancing and business succession planning.
From the earliest stages of your adult life through to your twilight years, life insurance serves a purpose. It is a good idea to make sure that you have sufficient coverage in place, and it is important to review your policies periodically as your family grows and their needs increase.
Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.