Many people don’t realize it, but nearly everyone has an estate and needs estate planning. Your estate is everything you own. For example, your car, home, rental properties, checking and savings accounts, investments, personal property, retirement, etc. Some estates are large while others are small, but all estates have at least one thing in common, you can’t take it with you when you die.
Extremely important to most people is what happens to your estate upon death. Who gets what? When do they get it? Who oversees my estate when I die? If you’re like most people, you want to control what happens to your estate. In order to do that, you need to provide instructions stating the answers to each of those questions. In addition, you’ll want to ensure your wishes are followed while minimizing the taxes, legal fees and court costs.
That is estate planning. It’s the act of preparing in advance the correct documents to ensure your wishes are followed upon your death. That’s the basic definition, however, it is much more than that. Estate planning should also include:
- Naming the person in charge of your estate.
- Your instructions for your care if you become disabled or incapacitated before you die.
- A Power of Attorney.
- A Health Care Power of Attorney or Advance Directive.
- Nominating a guardian for minor children.
- Nominating a guardian or conservator for yourself if the need should arise.
- Provisions for family members with special needs without disrupting government benefits.
- Beneficiary designations on life insurance and other benefits.
- Business succession planning.
- Ways to minimize taxes, court costs, and legal fees.
Estate planning should be an ongoing process. It is important to review your estate plan regularly to make sure everything is up to date with your current goals and plans.
Everyone should have an estate plan.
It is important to remember that estate planning is for everyone, not just retired people or the wealthy. Unfortunately, none of us know how long we will live, so having an estate plan prepared immediately is vital.
If you don’t have and estate plan, State law will determine who gets what.
Many don’t realize it, but if you die without an estate plan, your assets will be distributed according to the probate laws in your state. This is extremely important to think about if you have a blended family or minor children. With a blended family, your spouse is entitled to part of your estate and your children a separate part. Unfortunately, it may not be the way you want. In addition, if you have minor children, the court will appoint the person to be their guardian and who controls their inheritance. With an estate plan, you nominate who you want to be your kids’ guardian and who controls their inheritance.
What happens if you yourself become incapacitated or disabled?
An essential part of a good estate plan is who will take care of you and your estate if you were to become incapacitated or disabled. Again, if you don’t have the proper documentation in place, the Court will make these decisions which may or may not align with your personal preferences. Estate planning allows you to pick the people to take care of you and your assets in this event.
Estate planning doesn’t have to be expensive or complex.
One reason many people put off estate planning is they believe it will be too expensive. It’s true that more complex estate plans can be rather costly, but it doesn’t have to be. You can start now with a simple estate plan that is within your budget. A basic will, a general power of attorney and health care directive can be done easily and affordably. As time passes, you always have the option to update your estate plan. As a warning, don’t try to do this yourself to save money. An experienced attorney will be able to provide critical guidance and give you the peace of mind that your estate plan is prepared properly.
Start planning for the future now.
None of us really likes to think about possibility of being unable to make decisions for ourselves or about our own death. Many families are caught off guard and unprepared when tragedy strikes. That’s why its critical to get something in place now. If you wait, it might be too late.
The best benefit is peace of mind.
Knowing you have a properly prepared plan in place give you and your family peace of mind. This is one of the most thoughtful and considerate things you can do for yourself and for those you love.