It is generally understood that planning for the future is essential for every adult. However, estate planning is often cast aside due to time constraints or because talking about topics related to death can be uncomfortable. For some people in Texas, estate planning may seem unnecessary because they have so much debt compared to assets.
The average person in the United States has just $5,000 in his or her retirement savings account. At the same time, debt has almost tripled since 2003 among Americans in their mid-60s. Part of the problem is that older people are refinancing their mortgages, which essentially means they are adding 20 to 30 years’ worth of payments. In other cases, they are taking cash out of their homes through reverse mortgages.
Some of today’s higher debt levels among older Americans can be attributed to older adults’ trying to cover the cost of their children’s education. In other situations, getting into debt is easy for those attempting to manage the costs associated with going through a divorce. Other debt situations stem from efforts to cover personal costs following the loss of a job late in life.
Whether one has high asset levels or high debt levels, estate planning is essential to ensure that one’s heirs inherit the assets intended for them. Failure to create an estate plan may only lead to confusion and conflict among surviving family members after one passes away. An attorney in Texas can provide guidance in creating a well-thought-out estate plan that reflects one’s financial situation and goals.
Source: columbusceo.com, “Estate Planning: Taking Debt into Retirement“, Mike Mahoney, Jan. 23, 2017