While many people would claim that they don’t need a will or an estate plan, the reality is that most people do in fact need a professional and up to date estate plan. While many people claim ‘I don’t have an estate, so why do I need an estate plan?’, estate planning is not just for those who own a home. Estate planning covers everything you have complete or partial ownership of, including any real estate, personal property, investments, bank accounts, retirement plans and any interests in a family business or partnership. Your estate plan dictates your wishes for these assets for when you pass away. Here we look at why you need estate planning and how an up to date estate plan is better for you and your family.
Directing Your Assets
One of the greatest benefits that an estate plan provides is the ability to choose what happens to your assets once you’ve passed away. If you die without a will or ‘intestate’, the inheritance of your assets will be directed by state intestate laws and probate court. These laws vary from state to state, but usually dictate benefits going to spouses and children. Composing an estate plan ahead of time gives you the opportunity to decide where your assets will go, and protect your loved ones from probate court.
Avoiding probate is one of the greatest motivators for completing an estate plan. So many people have heard horror stories about the probate process and wish to avoid this happening to their loved ones and beneficiaries. While estate plans sometimes need to go through probate as well, having a will makes the probate process simpler and quicker.
Without advance estate planning, a significant portion of an estate can be lost to state or federal estate taxes or state inheritance taxes. By working on an estate plan with an estate planning lawyer or building a trust, you can reduce or even completely eliminate the tax burden on your estate.
Asset protection planning has recently become an important reason why more and more people are getting estate plans. Early estate planning helps to protect your assets in the face of lawsuits and legal action. Once a lawsuit is approaching or even if you suspect a lawsuit may arise, it’s too late to begin an estate plan. Plan ahead and document your estate plan with a professional estate planning attorney ahead of time to protect your assets.
Estate planning is about preparing for the worst, and you never know when the worst will happen. Your beneficiaries may still be young or not in an ideal position when your assets pass on to them.
However, your estate plan can take this into account by providing guidelines that protect beneficiaries who are minors, or protect adult beneficiaries from bad decisions. Your estate plan can allow you to designate a guardian or trustee for minor beneficiaries. It can also help to protect beneficiaries who may be at risk of making bad money choices, or who may be under the influence of others. In this way, your estate plan not only helps you to provide for your beneficiaries into the future, but allows you to protect them as well.
Estate planning is really essential to think about for everyone over the age of 18. Even if you are doubtful about whether you need estate planning, it’s worthwhile discussing a will with a local estate planning lawyer so you’re not caught unprepared for the future.