Most people have limited knowledge about planning an estate. Many consumers in Maryland think that planning for estate administration simply consists of having a will in place. Although this is certainly an important estate-planning tool, there is more to planning an estate than just a will. Two estate-planning tools that people many times forget are life insurance and retirement funds.
Life insurance is a cost-effective method for covering debts one currently holds. Usually, people do not want to leave their loved ones with the responsibility of repaying this debt if something unexpected happens. The death benefits from life insurance are a good way to ensure that loved ones have the financial capability of repaying any debts left along with his or her estate.
Retirement funds are another way to help make sure that beneficiaries have the financial ability to repay any leftover debts. Along with providing money for one's retirement years, beneficiaries will be able to obtain the money left over in the fund in the case that one passes away. However, it is important to properly update one's beneficiary designations on these accounts. Failure to do this can result in beneficiaries not being able to receive intended funds.
On the other hand, planning for estate administration will be different for everybody. One's estate plan will be based upon a person's particular situation as well as one's estate planning goals. However, no matter what one's situation, it is never too early to begin thinking about planning for the future in Maryland or any other state.
Source: DailyFinance, "6 Estate Planning Moves You Should Make in Your 30s", Michele Lerner, Oct. 10, 2014