Everyone that is over the age of 18 needs an estate plan. The amount of your wealth or your age do not matter. If you are a millionaire or just getting by financially, you need an estate plan. If you are nearing the end of your life or just graduated from high school, you need an estate plan. An estate plan keeps you and your loved ones protected in case you become incapable of handling your affairs or pass away.
The Key Takeaways
- Everyone needs a lifetime plan and an after-death plan no matter their age or financial situation.
- Being prepared for incapacity will allow you to be in control of whomever cares for you thus avoiding a guardian or conservator proceeding draining your assets and taking control from you.
- Having up-to-date health care directives is also important for every adult.
- Written instructions will allow you to choose who is in charge of your estate and how your assets are distributed.
- Getting counseling and assistance from an experienced estate planning attorney will make the process smoother and guarantee everything is done right.
What is an Estate Plan?
Your estate is made up of your assets which include cars, homes, bank accounts, investments, life insurance, furniture and all personal belongings. Whether your estate is small or large it cannot go with you when you die so there are probably things that you want to go to specific people. An estate plan lays out those instructions.
In order to ensure who receives your assets and belongings, what they receive and when they receive it, you need written instructions. An estate plan are those written instructions. A plan for your children will also need to be written down to be sure they are cared for by whom you choose and that their inheritance goes to them.
An estate plan that is properly prepared will also include instructions for your care and management of your assets if you were to become incapacitated. This could be a long term or short term situation because of an injury or illness. If proper documents are not ready for this situation, your family will have to go to the court to get permission to use your assets and to be responsible for your care. This will take the control from you, take time and use some the assets that could be used to care for you. It makes the difficult situation even harder for those you love.
Having a plan ready can mean more to families with modest means. These families do not have the funds to pay unnecessary court costs and legal fees. When a written plan was not created, state laws decide on the distribution of assets. Here is an example.
Steve and Alice had two young children but one day Steve died in a car accident on his way to work. He had no estate plan so according to state law, his assets were divided into three sections. One going to Alice and the other two going to each child. Alice had been a stay at home mom but was forced to go back to work. Guardianships were set up for each child by the court. This required ongoing court costs along with fees for accounting, guardianship and attorneys. Once the children reached 18 what was left of their inheritance was not even enough to pay for college.
What You Need to Know
Don’t create an estate plan yourself! Having the counseling and assistance of an experienced estate planning attorney that knows the laws in your state is needed. The attorney will guide you through difficult decisions and know what documents need to be used to protect you and your loved ones. The correct documents are needed to document who will care for your children if you became incapacitated or deceased. Experienced estate planning attorneys will direct you through the process to ensure what you think will happen if you became incapacitated or deceased will actually happen.
Actions to Consider
Call or email our office today to set up an estate planning consultation. As experienced estate planning attorneys, we can make the tough topics more manageable to discuss. You need not be worried about life changing and changing your plans. Having an estate plan based on your current situation is the best practice!