Who Needs an Estate Plan?
If you’re reading this, you need an estate plan. Why? The short answer is “Everyone, age 18 and older needs an estate plan.” It doesn’t matter if you are old or young, if you have built up considerable wealth or if you are just entering adulthood – you need a written plan to keep you in control and to protect yourself and those you love.
Key Takeaways
- Every adult, regardless of age or wealth, needs both a lifetime plan and an after-death estate plan.
- Planning for incapacity will keep you in control and let your trusted loved ones care for you without court interference – and without the loss of control and expense of a guardianship or conservator-ship proceeding.
- Every adult needs up-to-date health care directives.
- You need to leave written instructions to make sure you are the one who selects who’s in charge of when and how your assets will be distributed.
- We all need the counseling and assistance of an experienced estate planning attorney to help us make good decisions.
What is an Estate Plan?
Your estate is comprised of the assets you own – your car, home, bank accounts, investments, life insurance, furniture, and personal belongings. No matter how large or how small your estate, you can’t take it with you when you die, and you probably want certain people to have certain things you own.
To make sure that happens, you need to provide written instructions stating who you want to receive your assets and belongings, what you want them to receive, and when they are to receive it – that is the essence of an estate plan. If you have young children, you will need to name someone to raise them in your place and to manage their inheritance.
A properly prepared estate plan also will have instructions for your care (and the management of your assets) if you become incapacitated, even for a short time, due to illness or injury. Without the proper documents in place, your family will have to ask the court for permission to use your assets to take care of you and to oversee your care. That process is out of your control and it takes time and costs money, making an already difficult situation even more difficult for your family.
It might surprise you, but having a plan in place often means more to families with modest means because 1) they can least afford to pay unnecessary court costs and legal fees and 2) state laws, which take over in the absence of planning, often distribute assets in an undesirable way.
Here’s an example:
Sam and Meg had two young children. Sam died in a car accident on his way to work. Because he had no estate plan, the laws in his state divided his estate into thirds: one third went to Meg and one third to each of his children. Meg, a stay-at-home mom, was forced to go back to work. The court set up guardianships for each child, which required ongoing court costs, including accounting, guardianship and attorney fees. By the time the children reached 18 and received their inheritances, there was not enough left for them to go to college.
What You Need to Know
Don’t try to do estate planning yourself. You need the counseling and assistance of an experienced estate planning attorney who knows the laws in your state and has the expertise to guide you in making difficult decisions such as who will raise your children and who will look after your care during incapacity. That attorney will also know how to carefully craft the appropriate estate planning documents, so that what you think will happen when you become incapacitated or die actually happens.
What to Do Next
Call or email our office now to set up an estate planning consultation appointment. We make tough topics manageable to discuss and talk about. Don’t worry about how life will unfold; the best practice is to have your plan prepared now based on your current situation.