Why You Need An Estate Plan

Let’s immediately get a few misconceptions about estate planning out of the way: You don’t need a mansion and priceless works of art to need an estate plan, and planning for the future is not limited to couples at or approaching retirement. The truth about estate planning is that it is something that almost everyone needs to do regardless of what they own or don’t own, and you can meet with an estate planning attorney at any stage in life but the sooner the better.

Estate planning accomplishes more than just creating a strategy for distributing the money and assets you own to loved ones when you die. An estate plan consists of legally enforceable documents that designate someone you trust to see to it that your estate is distributed according to your wishes when you die, to handle your financial affairs while you are alive if you are incapaciated, and make decisions about your medical care should you be unable to make them on your own. 

To give you a better idea of the benefits, including peace of mind, that you derive from having an estate plan in place, here are a few reasons to schedule an appointment with an estate planning attorney.

Ensures that your wishes are honored in life and after death

If you were to be incapacitated by an injury or serious illness, would the investment strategy that you successfully use continue to be followed? Why wonder, when your attorney can make a durable or a general power of attorney a part of your estate plan to designate a person who you trust to handle your financial and business affairs for you and according to your expressed wishes.

A power of attorney for health care lets you designate a trusted relative or friend to consult with your doctor and make decisions in line with your stated wishes about medical care and end-of-life decisions when you are unable to make them on your own. Think of the peace of mind you can have knowing that you remain in charge of medical care and treatment even when incapacitated.

Avoiding the cost and delays of probating an estate

When you die, your estate must go through a court process known as “probate” even though you leave a will designating someone to serve as the executor of the estate with clear, precise instructions about how your money and estates should be distributed. Probate proceedings take time and involve court costs and legal fees that reduce the size of the estate and make your will available as a public record as part of a court proceeding

Your attorney can create a trust as part of an estate plan containing instructions for the distribution after death of the assets you transfer to the trust during your lifetime. Unlike a will, a trust does not go through probate. In addition to avoiding the costs and expenses of probate, the contents of your trust remain private.

Reduce the taxes paid by your estate and heirs

An experienced estate planning attorney can suggest options to incorporate into your estate plan that may reduce the taxes imposed on asset transfers. For example, a gift of money or a specific asset, such as a home or car, to one of your children may be subject to state or federal taxes. You may be able to reduce or avoid federal and state inheritance or gift taxes through estate planning.

Prevents loss of control over estate decisions

Fewer than half of the people in the U.S. have a will. When you die with a will or trust, a judge makes decisions about the appointment of an estate representative and the distribution of your estate follows guidelines established by the legislature, which may or may not be consistent with your wishes.

For example, if you have a child with serious health issues, leaving them a large sum of money as an inheritance may affect their eligibility for government-benefit programs they depend upon for support. If you die without a will or trust, state law may require equal distribution of your estate to your surviving children, including the child with medical needs. 

An estate planning attorney can help you create a special needs trust that leaves money to a child without jeopardizing their eligibility for government-benefit programs, including the Supplemental Security Income and Medicaid programs through the Social Security Administration. Instead of a lump-sum inheritance, the money that you place in trust can be used to pay for medical care and other things that are not covered by government benefits, which will not affect the child’s eligibility for continued government assistance.

Conclusion

An estate plan can be as simple or as complex as your needs dictate, but you have control over it through the decisions you make in consultation with your attorney. Stop finding reasons not to do it, and make an appointment to begin planning your estate.