Reasons Why Everyone Needs Estate Planning
Estate Planning is a fancy way of describing a written document that ensures that after you die or become incapacitated your property is passed in an efficient, orderly and respectful manner to the individuals or organizations you name as beneficiaries. You do not need to be wealthy to have an estate plan; you simply need to have possessions or money, even the smallest amount, to be passed on. Additionally, estate planning refers to medical and health procedures and power of attorney documents that make sure your wishes are carried out if you are unable to make decisions on your own behalf.
1. Because waiting until after you die is too late and too expensive for your family
Many people seek the help and advice of an estate planning attorney after a loved one has died. Estate planning is for you to deal with before you die and not your family or partners to deal with after. The following two reasons going into further detail.
2. To ensure that your wishes are followed
Many people either do not discuss death with family and friends because it is an uncomfortable topic. If your family does not know your wishes or you have an estranged relationship with your family it is important for your wishes to be written in a legal document to be carried out after you pass. By law your family inherits your estate and makes decisions on your behalf. The following is the hierarchy of inheritance in this particular order: your (heterosexual) spouse, your children, your parents, your siblings and so on.
3. To avoid probate
If your wishes are not in a legal document your family can argue over your estate for years in probate court. Probate court is expensive and usually a long and painful process. By having a Last Will and Testament your wishes are legally documented and a guardian of your estate is named to follow your instructions.
4. Protecting beneficiaries
There are two main reasons for protecting your beneficiaries. First, because the inheritor is a minor child and needs adult guidance. All states require that if the beneficiary is a minor child that a guardian or conservator of the estate must be appointed. The guardian or conservator must be someone you trust to follow your wishes and to not mishandle the estate until the minor child becomes a legal adult. If the beneficiary is already an adult but is unable to make decisions on their own behalf or has a history of making poor decisions, you can set up a trust to protect the beneficiary from squandering the inheritance or from being taken advantage of by outside parties.
5. Protecting assets from creditors
Due to the current economic state, this aspect of estate planning has become quite popular. Even if you already have an estate plan, if it does not include asset planning protection you will want to get it revised. Once a lawsuit is filed, it will be costly and there is no reversal without legal help. Asset protection planning will protect the beneficiaries of your will from being served by your creditors after you death.
6. Protecting partners
If you are in a relationship but are not married, either by choice or because the law does not legally recognize marriage between you and your partner, you need certain documents to protect your partner. Unless you are legally married, the state will not recognize your partner and your assets and all decisions will be granted to your immediate and biological family. There are several agreements, contracts, trusts and wills that protect your partner after your death depending on your situation. Please contact Miller Legal Group for an explanation of these documents and we will find the right one for you.
7. Reducing Estate Taxes
This is the greatest financial advantage of having an estate plan and the one your beneficiary will benefit from the most. The state and government will implement an estate tax and an inheritance tax on your estate after you die unless you place your money in trusts. Again there are several different trust options that will depend on your situation. By doing this you can significantly reduce or sometimes eliminate the taxes completely.
This article is intended solely to be informative and should not be considered legal advice.