Three Reasons Everyone Needs an Estate Plan – 3/29/2016
Estate planning is important on so many levels. And it’s not just for the wealthy. Having a basic estate plan in place is essential for everyone – from avoiding confusion to caring for the loved ones you leave behind to being sure they are the ones who receive your legacy, not Uncle Sam. The following are three distinct reasons for planning:
- Beneficiary planning so that your assets to pass to who you want, when you want, and in the amounts you want. Having up-to-date Wills and/or Trusts can help avoid any confusion and ensure that your wishes are followed.
Having up-to-date documents becomes even more important when a minor child(ren) is/are involved. By creating the appropriate documents, you can name the guardian(s) you want for your child(ren) versus allowing the court to make the decision for you after it’s too late. Also important to consider is the timing of distributions. Staggering the ages that assets are received, such as 1/3 at age 25, ½ of the balance at 30, and the remainder at 35, will provide several opportunities for your child(ren) to learn to use the assets wisely.
- To avoid probate, which can create significant delays in distributions, be time consuming, and make your estate subject to additional costs. It also makes your estate a matter of public record, removing any privacy for you and your family.
For any assets that will pass directly with beneficiary designations, such as life insurance and retirement plans, you should be sure these designations are up-to-date. You might also consider the creation of a Trust(s) to own assets, which can help to avoid probate.
- To provide for blended families in the case of divorce, death, and/or remarriage. With blended families, there are more opportunities for things to go awry and often times, spouses (or former spouses) may not see eye-to-eye on things.
Taking the time to be sure your loved ones are properly cared for is well worth your careful consideration – and the expense – to be sure your documents are structured appropriately. If you haven’t reviewed your estate plan recently and would like to, please contact us. If changes should be made or documents have yet to be created, we are happy to provide you with sources for this.