What is Estate Planning?
When you or a loved one passes away, your house, car, furniture, and bank accounts will still exist. You might expect all of those things to pass seamlessly to surviving members of your family, but without proper estate planning there will be problems.
You build your career as best you can. You build a family that is uniquely yours. You form friendships. Your life, however you live it, has value.
It’s not always fun to think about what happens when we reach the end of our lives or to remember that things will go on once we’re gone. But whether you realize it or not, you are building a legacy as you live.
Estate planning is for everyone, whatever your life looks like. You may have lists of assets and want to ensure that your children are provided for. You may have a home that your family has made your own over twenty or thirty years. You may have a child with a disability and need to make sure your child lives as comfortable and dignified a life as possible once you’re gone. Your life and needs are unique, but everyone can benefit from planning for the legacy you’ll leave behind.
What Estate Planning Does For You
The biggest thing that estate planning does is take away questions. When a person passes away, their possessions, assets, and liabilities aren’t simply funneled to someone else; those things have to go through what’s called a probate process that involves (among other things) posting notices to allow creditors to make claims, distributing assets, and making sure a proper accounting is made to the courts.
This process can be made much faster and smoother if you take away the questions in advance. Questions like:
- Who gets the house?
- What liabilities can make a claim on the estate?
- Do assets go to your spouse or to children—or both? Grandchildren?
- What happens if one of your beneficiaries predeceases you?
- Will you be buried or cremated? Who will pay for it? Do you want a funeral?
These questions can feel overwhelming to most people when they have to be answered in the midst of grief, because this is a process that we don’t encounter… until we do. Whether it’s a parent or a partner who passes on before us, estate planning helps eliminate the uncertainties and make sure that your legacy and your life are respected when you’re gone.
Seven Reasons Why Everyone Needs an Estate Plan
Regardless of the size of your bank account or your family, there are lots of good reasons to create an estate plan, including the fact that you could be the biggest beneficiary of your advance planning. If you become incapacitated, you will need to have designated someone to make financial and health care decisions on your behalf.
Here are seven reasons why everyone needs an estate plan, including you:
1. Health Care
Having to make health care decisions for a loved one without knowing what he or she would want is one of the most difficult things a family may have to do. Defining how your medical needs should be handled in case you are unable to make those decisions for yourself and making a plan for long-term health care is a key benefit to planning your estate.
2. Avoiding Probate
Having an estate plan allows you to avoid probate, saving your family from the expense and hassle of going to court. You can use a living trust to avoid probate for the assets you wish to pass on to heirs, including real estate. A living trust also allows you to do disability planning in order to avoid having to set up a guardianship in the future. A qualified estate planning lawyer can help you create the trust document, name a trustee and transfer ownership of your assets to the trust.
3. Avoiding Family Feuds
Sentimental items often provoke more family fights than money. Creating an estate plan allows you to designate who will receive family heirlooms, jewelry, art collections and other possessions so there is no question after you pass.
4. Beneficiary Forms
Making sure the right people are listed on beneficiary forms for IRAs, life insurance, retirement plans and annuities will ensure those assets pass directly to the beneficiaries in a timely fashion. Beneficiary forms always trump a will, so you need to be sure that assets requiring beneficiary designations go to the intended recipient by keeping beneficiary forms up to date.
Ensuring the care of dependents – children, grandchildren, an elderly parent or a special needs family member — can be accomplished by setting up a trust in your estate plan. If you have minor children, you need a will to designate a guardian for them and provide instruction as to their inheritance.
6. Asset management
Naming the right person to manage assets wisely for the benefit of heirs will make sure the assets are not mismanaged and depleted from your estate.
7. Business succession
If you own a business, you need a succession plan to determine what will happen to the business if something should happen to you.
Four Documents, A Wealth of Peace of Mind
Estate planning works to smooth the burdens that can come with reaching the end of life. It’s more than just a will telling your family who gets the chinaware and who gets the house; proper estate planning helps establish your wishes in case of medical emergency or incapacitation and ensures that the life you have lived and built maintains dignity and respect once you leave it.
Here’s what that looks like:
The Advance Medical Directive designates someone you love and trust to make medical decisions for you if you are ever in a situation where you can no longer make them for yourself. It lets your family and medical professionals know how you want to be cared for – if you want to be allowed to pass naturally in as much comfort as possible or if you want your doctors to keep you alive artificially. These choices can be hard, but it’s your life and your body; you deserve to make your wishes known.
The Financial Power of Attorney designates someone you love and trust to handle your financial affairs if you are unable to do so yourself.
The Last Will and Testament informs your family and the county of your wishes. Do you want to be buried or cremated? It allows you to make sure the people you have spent your life loving receive what you want them to—whatever that may be. Your will allows you to go on providing for those loved ones even after you’re gone.
The Revocable Living Trust avoids the lengthy and expensive Probate process, designates trustees to wind down your final affairs, creates trusts for minors and family members with government benefits, and above all, provides privacy.
Those documents together help take the uncertainties out of life’s what-ifs. They’re for adults of any age.
At the Law Office of Lena A. Clark, we are committed to making sure our clients find the peace of mind that comes with eliminating uncertainties. It gives you the freedom to enjoy the life you have and know that your own unique legacy is exactly what you make it.
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