Do I Need An Estate Plan
Do you need an estate plan? Probably. Estate planning is something that most adults, even young adults, should do, especially if you have young children. Despite the perception of the term that it is something only the wealthy do, estate planning can be simple and inexpensive, especially when compared with the costs that could be incurred if you do not. An estate plan is a comprehensive plan that addresses the distribution of your property and guardianship of your children if you pass away. This includes wills, trusts, transfer on death instruments, insurance, and powers of attorney.
There are many reasons to create an estate plan, but here is a list of the top reasons:
- Name the people you would like to raise your children if something happens to you (guardians);
- Ensure property passes according to your wishes;
- AVOID PROBATE;
- Maximize the value of your estate that passes to your heirs;
- Minimize the stress placed on your family and friends by your passing;
- Select the person who will be in charge of distributing your property.
Who Will Get Custody of Your Children
For many young adults, it is easy to put off estate planning. The thought that something terrible could happen to you is a remote, distant possibility. Even so, it is best to adhere to the old saying “prepare for the worst and hope for the best.” If you have minor children, this is especially important. If you do not have an estate plan, you have not nominated anybody to be the guardian of your children when you pass. While the nominations are not binding, they are accorded significant weight by the courts and can deter and help defeat petitions from other family members to become guardians (keep in mind that often time, the guardian will have access to the money that you left to your children with little supervision on how they use the funds).
Property Passes According To Your Wishes
An estate plan also ensures that your property passes pursuant to your wishes. This is particularly important for people who have children and have been married more than once. If you do not have an estate plan the law allocates 50% of your assets to your current spouse and 50% to be split among your children. For many people with children from a previous marriage, a different allocation of assets to spouse or children is preferred. An estate planning attorney can create an estate plan to distribute your property in the manner you wish.
One of the most important reasons to have an estate plan attorney is to avoid going to probate. Any property which is not distributed by a trust, transfer on death instrument, or joint ownership will go to probate (there are exceptions for small estates with no real estate). If all you have is a will, your property will likely be probated. Probate costs can easily reach up to 10%-15% of an estate’s total value, and that is only if everything goes smoothly. If there are challenges or litigation, it can easily skyrocket to 50% or more. An experienced estate planning attorney can avoid probate and its associated costs by passing their property to your heirs by trusts, transfer on death instruments, joint ownership, or other instruments.
An investment in a proper plan now can protect your assets and provide a lot more for your children or spouse. By planning to avoid probate, you can dramatically increase the amount that is passed on to them.
Minimizing Family Stress
A loved one’s death is a trying time for the family. For many family members dealing with the death of a loved one, they must also contend with figuring out how to pay for funerals, caskets, and the myriad of other costs associated with a loved one’s death. Often time, family members must pay out of pocket and hope for reimbursement in probate, straining their own financial resources. The last thing you want your family to have to do at this time is to have to identify and collect your property and then attempt to get access to the property.
Without an estate plan or joint ownership with right of survivorship, just to get access to a bank account, a family member will need open a probate estate, petition the court to be appointed as administrator, send certain notices to all other heirs or interested parties, wait to have a hearing, wait to receive letters of office, and then fill out paperwork at the bank. It can take two months or more just to be able to pay your bills. An estate plan can ensure the appropriate people have access to your property immediately to help manage your household finances and the bills associated with your death.
Our experienced estate planning attorneys can help you create a comprehensive estate plan to address care of your children, distribution of your assets, and reducing additional burdens on your family in a most trying time.