Without an estate plan, your property and assets will be held by the state while the court conducts their Probate process. Not only does this mean that your loved ones cannot access anything belonging to you, but families also have to grapple with a range of complex legal proceedings and procedures. The probate court process can involve an immense amount of paperwork, and involve costly fees or unexpected expenses. Families must also wade through expensive lawyer fees as they make their way through the legal maze that is probate court.
The best way to avoid all of that and give your family peace of mind? You guessed it - Estate Planning.
What is an Estate Plan?
An estate plan answers the question of where your belongings are going after you've passed away.
"What if I don't have an estate?"
Believe it or not, you probably do! Here are some common things included in your estate:
Your home and any other real property that you own, your checking and/or savings accounts, any investments, your life insurance policy, your car, any furniture, or other personal property.
Estate planning may include:
Instructions for your medical care and financial matters should you become incapacitated before you pass away.
A list of guardians you've selected for any children under the age of 18.
Arrangements for income insurance should you be out of work due to injury or illness.
Arrangements for life insurance to assist your family after your passing.
Minimize any taxes, court expenses, and legal fees that arise by aligning your assets with your estate plan.
The ongoing ability to revise and adjust your plan over the course of your life.
Why Do I Need an Estate Plan?
Having a plan in place gives you control of who will own your possessions or what will happen to them, a level of control that is given to the state if you do not have an estate plan.
Consider this: You've become incapacitated and cannot bring in an income. Without an estate plan, the court will then appoint a conservator to control your assets. With an estate plan, your selected person(s) will control your assets and your care.
Consider this: You've passed away without a legal estate plan. Without an estate plan, the state will then distribute your assets according to their intestacy laws, which could leave your loved ones with very little inheritance or leave your children (under the age of 18) with a court-appointed guardian. With an estate plan, your assets will be distributed as you see fit between your loved ones, and your children (under the age of 18) will be left in the care of whom you've chosen.
How Do I Get Started?
The process of estate planning begins by deciding if you'd rather have a Will or a Living Trust. This decision should be thoroughly researched so that you know the pros and cons of both documents.
For example, while a Will does list your instructions for your assets, it does not cover assets that are not titled in your name and does not avoid probate.
A Living Trust is preferred by many because it can prevent the court from controlling your assets, puts all of your assets and instructions together in one document, can be revised at any time before you pass away, and can potentially avoid probate.
What is Probate?
Probate is often time-consuming, confusing, and hard on families after their loved one has passed away. See our recent post on Probate and why you want to avoid it.
During this process, the court will be analyzing your assets and determining what will happen to them (and any of your belongings). If you have a Will, this time will be spent by the court trying to essentially prove the validity of your Will.
When Should I Get Started?
The best time to start researching and planning is as soon as possible! While it's hard to accept our own mortality, it's not hard to do what's going to help your family the most - leaving them caught off-guard when something happens to you is what estate planning is meant to avoid.
This isn't something exclusive to those who are retiring soon - if you are aging, then it's time to start putting together a plan for how your assets should be allocated in the event of any unexpected changes or twists in life. You will benefit from estate planning regardless of your age, so don't let age scare you off from taking this incredibly important step.
In conclusion, estate planning allows you control over your assets, can protect your loved ones, is one of the most thoughtful things you can do for your family after you've passed away and is for everyone!
For more information about estate planning, check out our website today.