Estate Plan

Many people think that estate planning isn't terribly important for one simple reason: They don't think they have an estate that is worth the trouble. This is often the case with young people, who may think estate planning is only for the rich or the elderly, but it's an issue that can crop up at any age. Experts agree that many people have estates that are far bigger and more valuable than they believe.

Future Earnings

One thing to keep in mind is that future earnings -— and money you rarely see or use -— have to be factored in. If you have investments, for example, you need to know what will happen to them, even if they are in a retirement account and you don't plan to retire for decades. Additionally, it's wise to think about things like life insurance policies, which can be worth tens of thousands of dollars, though that money is never realistically seen or handled in life. On top of that, experts note that things like pension plans can be worth as much as, or more than, you make currently, considering that they pay out for years on end.

For example, a federal employee may have decided to participate in the Federal Employees' Group Life Insurance (FEGLI). The total value of the coverage may be worth up to five times that person's salary. On top of that, the person could use the Federal 401(k) program, known as the Thrift Savings Plan (TSP). The total value of these plans and the rest of the person's tangible assets -— property, bank accounts, and the like -— could exceed $1 million, even for someone who never considered himself or herself a millionaire.

An Accurate Valuation

As you can see, it's dangerous to let assumptions about wealth play into your decisions when doing estate planning. Overlooking assets and neglecting estate planning because of it can create many issues during divorce, after death, or if you become disabled. Make sure you do an accurate evaluation of everything that you own and your real wealth.

Learn About Your Legal Options

As you consider estate planning, it's important to know all of the legal options you have, and you need to know the right steps to take to do bulletproof estate planning that will hold up in court if there is ever a dispute.