The 3 Reasons You Need an Estate Plan
To ensure that your assets are distributed according to your wishes and that your loved ones are taken care of in the way that you want after you pass away, it is important to set up an estate plan. An estate plan is a comprehensive set of legal documents that outlines your wishes for the management of your assets during your life if you become incapacitated, your healthcare preferences and instructions for end-of-life care, and distribution of your assets upon your death.
There are three main reasons you need an estate plan:
1.First, did you know that probate can happen even while you are alive? Most people think of probate as the legal process that occurs when you die either without an estate plan, or with just a will (rather than a trust). But, probate courts are also involved when a person becomes incapacitated and they either do not have a strong, robust power of attorney (i.e, they got one for free online that does not contain all the provisions it needs) or if they have no power of attorney at all.
For example, if you become unable to make your own financial decisions because of dementia and you have not preselected someone to make financial decisions for you, the only way anyone will be able to help you, use your assets, sign your checks, sell your car or house, or do anything financially that you would have done, is to get a conservatorship in place because you no longer have the mental capacity to create a power of attorney and designate someone you trust. If a court is involved, the court might pick a professional fiduciary who does this work for a fee and who is a stranger. Having an estate plan ensures that the probate process is as smooth and efficient as possible, which saves your loved ones time, stress, and money.
2. Secondly, an estate plan can help ensure that your assets are distributed according to your wishes. When you die without an estate plan in place, this is called dying “intestate.” Without an estate plan, your assets will be distributed according to the default rules of state law, called intestate succession, which may not align with your intentions. This can result in family disputes and unnecessary legal expenses.
3. Finally, an estate plan can provide a sense of security for you and your loved ones by documenting your wishes in a legally enforceable manner. This ensures that your loved ones are protected and provided for in the way that you want, guardians can be named for your minor children, and you can even ensure that your pets are cared for after your death.
What an Estate Plan Includes
Our most popular estate planning package is our living trust package which includes: a living trust and associated documents, a pour-over will, a financial power of attorney, and health care directives (health care power of attorney, living will, final disposition, HIPAA waiver, etc.).
A will outlines how your assets should be distributed after your death. However, a will does not avoid a probate court because wills are merely instructions to a probate court about who you want to receive your assets and who you want to be in charge of your assets. People with minor children also can use a will to designate a guardian for their children.
In addition to a will, trusts can be an essential component of an estate plan. Trusts allow for the transfer of assets to a trustee who manages the assets according to your instructions during your lifetime and after your death. A trust can also minimize taxes and ensure privacy during the distribution of assets. Most importantly, having a trust avoids the time and expenses of probate.
Powers of Attorney for Health and Finances
Lastly, powers of attorney allow you to designate someone to make financial and health care decisions on your behalf if you are unable to do so. Advanced healthcare directives outline your preferences for medical treatment and end-of-life care.
Getting Help with Estate Planning
If you are considering setting up an estate plan, it is important to consult with our experienced estate planning attorneys who can guide you through the process and help ensure that your wishes are properly documented and legally enforceable. Free or low-cost legal forms online often lack very important components. We have seen many horror stories with improperly worded and executed forms that people have purchased or found online. It is substantially less expensive to get a good estate plan in place compared to the cost for trying to fix problems that happen either when there is no estate plan in place or there is a poor estate plan in place. When you have an estate plan, you can have peace of mind knowing that your loved ones will be taken care of in the way that you want. Contact us to get started with your estate planning today!