One of the most common misconceptions we hear frequently about estate planning is that it is only useful for millionaires and rich celebrities. Just the word “estate” might conjure up visions of mansions, private jets, and limousines. Happily, this misconception is not true, and estate planning is for anyone who has assets (so, pretty much every adult in America).
In this article, we will talk about who should have an estate plan, the benefits of estate planning, and how you go about setting up an individualized estate plan.
Who Is Estate Planning For?
The answer to this is simple: every adult should have an estate plan. According to CNBC, two-thirds of Americans do not have an estate plan, with 40% saying that they simply haven’t gotten around to creating one. 33% said they do not have an estate plan because they don’t feel as though they have enough assets, and the remainder said that they’ve eschewed estate planning because it is too costly.
It will be far more costly to not have an estate plan after you die, as dying intestate leaves your assets in the hands of the court. Probate is a long, expensive process that pays off your creditors first and gives your family what’s left, if anything. More than likely, this is not the way you want to see your estate distributed.
If you’re young and don’t have many assets, you’ll probably only need a few simple items, such as a will, beneficiary designation, and both financial and medical powers of attorney. If you have kids, you’ll have to name a guardian in your estate plan. Those who are older with more assets, particularly those who have health issues, may need a more expansive estate plan. Estate plans are not one-size-fits-all; each estate plan is tailored to its creator’s personal and financial lifestyle and situation.
The Benefits of Estate Planning
There are plenty of benefits of estate planning that will encourage you to “get around” to making one. These include:
· Estate planning minimizes the delays, expenses, and privacy invasions that so often accompany probate court.
· Your assets go to the right beneficiaries when you have a properly-executed estate plan.
· Estate planning allows you to plan for your end-of-life care, which is especially beneficial for those who want DNR agreements and other special, personal arrangements.
· You can arrange trusts and plan for the future of your accounts and investments, ensuring your financial legacy goes on.
· You can designate a trusted executor for your last will and testament.
· Guardianship for minor children can be arranged through an estate plan, ensuring that your kids have a stable future even if the worst comes to pass.
· If you own a business, estate planning will ensure its future after you’re gone (including if you want to sell it posthumously).
· Lastly, estate planning can help you legally minimize estate taxes after you die.
As you can see, there are a lot of reasons to have an estate plan. In the next section, we’ll talk about how you can set one up.
How To Set Up An Estate Plan
Luckily, this part is pretty simple. All you need to do is pick up the phone and call an estate planning attorney. He or she will help you determine what documents you need in your estate plan, setting up you and your loved ones for a smooth transition, should something happen to you.
You might be tempted to create your own will by using a “DIY legal service.” While this might seem convenient (and cheaper), it can cause a lot of issues, as the law is very technical and finicky. It’s easy to miss an important element or requirement when creating an estate plan, and this omission can to a lot of trouble in court.
No matter who you are, you need a plan for what happens after you die. Dying intestate only lengthens probate, putting your loved ones through an expensive, time-consuming court process that will, most likely, benefit them very little. Contact a WFP attorney today to learn more about how to create an estate plan.