Are you part of the 55% of Americans who don’t have a will or any type of formal estate planning?
If so, consider rethinking that situation, before the summer months create an added layer of outdoor activities, vacations and other distractions. Here are some essential benefits of creating an estate plan:
Who gets what? For many people, this is the big reason. Specifically, you want to decide how your assets are distributed. If you fail to do so, the state has fallback policies that will almost certainly not reflect your wishes. Executing a will or transferring your assets in a revocable trust are examples of steps you can take to ensure that your wishes are respected.
Minimizing probate. Your legal possessions can be subject to the probate process, which can be time- and money-consuming, unless you have taken legal measures to avoid it. An estate planning attorney can help you decide the estate management options that are best utilized in your specific situation.
Protecting your children. If you are survived by young children and no spouse, your will can specify who you would like to assume the role as their guardian and conservator. Wills can also restrict children’s access to their inheritance until an age that you feel is appropriate.
Shielding assets and insurance proceeds. There’s a natural desire to make sure as much of your estate goes to loved ones, or other organizations that are important to you. Without proper provisions, life insurance benefits can be subjected to estate taxes, future creditors can file claims, or proceeds can wind up in the hands of people they weren’t intended for, such as a spouse’s future wife or husband.
Maintaining as much control as possible. Unfortunately, sometimes people become incapacitated without clearly sharing their wishes about health care, financial and estate decisions. Establishing a power of attorney and health care power of attorney, as well as conveying their desires will dramatically increase the likelihood that actions that are taken at end stages of a person’s life are consistent with the decisions he or she would have likely made on their own, if they’d had the ability to do so.
With so much at stake and so many factors to consider, it’s a good idea to set aside time for a detailed dialogue with a qualified estate planning attorney that will lead to the creation of an effective estate plan. Any time life circumstances change schedule a follow-up meeting to see if estate plans should be modified as well.