Failing to plan is often another way of planning to fail.
In other words, we all have an estate plan in place…in one way or another. Either you have planned the care for your children and assets according to your interests, or you have left it up to someone else.
Simply put, estate planning is a good idea for many reasons.
The following is a brief list of common reasons for completing your plan (will, trust, etc.) sooner, rather than later.
Estate Planning allows you to:
- Designate who will manage your affairs if you become disabled and when you pass away;
- Avoid probate, during your lifetime and once you are gone;
- Minimize the amount of tax payable by your estate at death;
- Protect children from a prior marriage if you pass away first;
- Protect assets inherited by your heirs from lawsuits, divorces and other claims;
- Provide for children who may not be capable or experienced in managing money without giving them a “windfall;”
- Insure that a specific portion of your estate actually gets to grandchildren, charities, churches, etc.;
- Eliminate potential liability associated with joint ownership;
- Protect a portion of your estate if you pass away first and your surviving spouse remarries;
- Assure an education for children/grandchildren, despite what they (or their parents) dream of doing with the inheritance.
Misconception: -n. A false or mistaken view, opinion or attitude.
Estate planning is one area of law that has been the subject of many mistaken views, opinions and attitudes. This article serves as an opportunity to correct some of those false ideas offered when estate planning is discussed.
1. Estate planning is only for the elderly.
This is true, as elderly people are interested in having their assets protected and distributed according to their wishes upon their death. It is also true, however, that younger people are just as interested in such protection and distributions, especially if minor children are involved. Since death and disability can strike at any age, estate planning is for anyone who wants to have a smooth transition in such an event.
2. Estate planning is only for people who are married.
Married people certainly need an estate plan. Single people, in some cases, need a plan even more. When you are single, state laws typically provide for assets to go to the parents or children, which sometimes places assets under the control of biological parents of minor children (such as ex-husbands, etc). This is often an unimaginable option for many. For unmarried individuals with neither children nor an estate plan, assets may go to parents or siblings, even when that is not the desired result. With a plan, the results that you desire can become a reality.
3. Estate planning is only for extremely wealthy individuals.
Issues surrounding estate taxes often do become motivation for the wealthy to consult an estate planning attorney. Many of the elements of a comprehensive estate plan, however, such as communicating your health care wishes, providing for the well-being of you and your minor children, and passing on family values while creating incentives for heirs to behave in a desired manner are issues that affect everyone. Further, estate planning can help provide divorce and creditor protection for your spouse and children.
4. I don’t have children, I don’t need a plan!
Some individuals may not care what happens to their assets upon their death so they do not believe that they need a plan. Such situations may require more thoughtful planning than situations where children are involved. It is important to understand that estate planning includes provision for unfortunate situations of incompetency, where an individual finds himself or herself alive, but unable to make decisions for himself/herself. Proper planning will ensure that the individual will be properly cared for while alive, yet incompetent.
5. I don’t need a trust, because I have a will.
Generally speaking, having a will is better than having no plan at all. However, a will does not avoid probate. The probate system was established to take assets which were titled in the name of the person who died and re-title them to someone else. The probate court relies on either state laws, or a decedent’s will to determine how to re-title those assets. If a properly drafted trust is established, and the assets are in the trust, they can avoid the public process of probate and the potential costs and delays involved.
6. I don’t need to do estate planning because I am never going to die.
Yes, you are! Simply put, estate planning is for those that are single, married, with children, without children, young and elderly. Estate consultations with TGQ Law will help you get the most out of life while preparing for the possibility of incapacity or death. We can help you choose the plan for you and your family.