Have you been putting off your estate planning? If so, you are like many Americans. Approximately 55% of Americans die without a will or estate plan. While many people prefer not to think about their own mortality, creating an estate plan is an incredibly important exercise that can save your loved ones from confusion and conflict down the road. Here are six great reasons why you need an estate plan, immediately.
- Estate planning is about much more than what happens to your belongings when you’re gone. One of the most important aspects of creating an estate plan is preparing for what you want to happen if you are incapacitated. As the Terri Schiavo case brought to the nation’s attention, legal battles over what will happen to an incapacitated person can drag on for years. It is critical to express clearly and properly document your healthcare wishes through a valid healthcare power of attorney.
- Protect your family. Whether you have a minor child or want to protect adult beneficiaries from bad decisions or creditor issues, an estate plan is an important way to ensure your family is cared for when you’re gone. Parents of minor children can eliminate costly legal expenditures for relatives by appointing a guardian and trustee through your estate plan. Parents also need to consider not only who will raise your children, but also who will provide for them. Parents with minor children should make sure they have adequate life insurance or other resources to provide for their families without their income. Furthermore, creating a trust instead of giving the assets to the beneficiary outright can reduce the chances that your beneficiaries will squander their inheritance.
- More families than you think fight over a loved one’s assets after they die. A close friend or family member’s death is undoubtedly very stressful, and a legal battle over who gets what can break a family apart. Preparing a proper estate plan to dispose of your assets in accordance with your wishes can help eliminate some of the familial strife by clearly indicating who gets what and why.
- You can choose how your assets are distributed. Planning ahead ensures that your assets will be distributed in the manner you want, which may differ significantly from the statutory defaults. For example, you may want the person caring for you to receive more from your estate than the rest of your kids, you may want to set aside more of your estate for a family member with a disability, or you may want to give some or all of your estate to a charity. An estate plan can be customized to your particular family situation and helps ensure that your wishes are honored.
- Privacy. While probate can be costly and time-consuming, many people fail to realize that probate is a matter of public record. This means that information you may wish remained private, including the value of your assets, the beneficiaries of your estate, and any claims made by creditors, will be public knowledge available for anyone to review. Those who want their personal information to remain private need to establish a trust to avoid probate.
- It may be less expensive than you think. Everyone should have an estate plan, not just the super wealthy. Many people worry that an estate plan will be prohibitively expensive or think that they don’t have enough assets to make an estate plan worthwhile. For many families, a simple estate plan is all that is necessary and can be prepared relatively quickly and inexpensively. If you die without an estate plan, your estate may be forced to incur significantly more in legal costs to clean up the legal issues you left behind than it would have cost had you had an estate plan prepared.
While it may not be fun to spend time and money preparing for your death or incapacity, it is important to do so now. Avoiding estate planning can create many problems for your loved ones in the future and can force your family members to incur significant expenses in probate. Plan ahead, protect your family, and create an estate plan.
If you have any questions about how the information in this article may affect you or your business, please contact Diana M. Eisenberg at deisenberg@stroudlaw.com or (608) 257‑2281 or your Stroud attorney.
DISCLAIMER: The information in this article is provided for general informational purposes only, is not necessarily updated to account for changes in the law, and should not be considered tax or legal advice. This article is not intended to create, nor does the receipt of it constitute, an attorney-client relationship. You should consult with your own legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.
