This might shock some people, but 2022 is coming to an end in less than one month. This year has been eventful, filled with ups and downs, new memes, an election, celebrity kookiness, and more as we have filled out yet another page in this chapter of American history. How did your year go? Did you accomplish everything you wanted? 

As we look back at our year, it is important to consider whether we made progress with our long-term goals. For example, did you set up an estate plan? If you didn’t have this as a goal, you should. In this article, we will discuss why an estate plan is important. If you haven’t set up one in 2022, make this your New Year’s Resolution (and then make sure you then accomplish it). Listed below are the life-changing benefits of protecting your assets and loved ones through an estate plan. 

Beneficiaries Are Protected

When you die, who gets your assets? When we refer to assets, we are talking about property, cash accounts, physical items, and similar possessions. At some point, your assets will no longer be your own and, without an estate plan, they could wind up in the hands of your creditors, if not the government (eek!).

Through an estate plan, your beneficiaries are protected, and your assets are distributed expeditiously, tax-efficiently, and legally. Through documents like a last will and testament, you can ensure that your possessions go to the people you want and no one else, inadvertently.

Here are some of the benefits of a last will and testament, a document that is the final expression of where you want your assets to go after you die: 

  • You control what happens to and with your property after death.
  • You can leave assets and property to specific people. 
  • You can appoint certain persons to manage and handle the distribution of your property. 
  • A will can, if done properly, be the “last word,” minimizing disputes and feuds between heirs and other relatives.

A last will and testament is just one example of the many legal documents and tools in an estate plan, some of which you learn about when you read through this article.

Kids Are Protected

If you have minor children (kids who are under eighteen), then you especially need an estate plan, not only so that you can name your children as your beneficiaries, but also so that you can set up guardianship papers. 

Guardianship papers are a “worst-case scenario” type of documentation. These papers detail who will be your kids’ legal guardians in the event that something terrible happens to you (and your spouse, if you have one). Talk to your proposed guardian before appointing them to this big role. Make sure they are willing to take on this responsibility, and ensure that they can take care of your kids’ day to day needs, much in the same way you would.

Probate Is Minimized (Or Even Avoided)

Though a last will and testament must go through probate, a trust does not. A trust is a common tool in estate planning. It is a three-party fiduciary relationship in which the grantor (you) gives title of an asset to a third party for the benefit of a beneficiary. 

At a time you specify, such as when you die, the title to the asset will pass to your intended beneficiary. The trust does not have to go through probate, which protects you and your family’s privacy. It is easier to transfer title of your assets via a trust than if you had to pass through the time and expense of probate court. 

Assets Are Managed Even If You’re Incapacitated

While many documents in an estate plan deal with what to do after you die, there are some, such as a healthcare directive and power of attorney, that involve what happens to you if you are too incapacitated, due to illness or injury, to make decisions for yourself. Through these documents, you can ensure your wishes are still honored. Here is a brief overview of each: 

  • Healthcare directive. This “living will” details what you do and don’t want, as far as medical treatment and lifesaving care goes. This document, which often deals with resuscitation and similar procedures, is very personal. It is also important to ensuring your wishes are met, even if you can’t communicate them. 
  • Power of attorney. A power of attorney is a trusted person that you appoint to manage your financial and/or healthcare affairs in the event you are unable to make decisions on your own behalf. 

Again, these documents are just two of many examples of how estate planning can help you take control of your present and future. Contact a WFP attorney today to create your own estate plan.