The third week of October is National Estate Planning Awareness Week (Oct. 15-21, 2018). Estate planning is important for everyone regardless of wealth or family status, because if you become incapacitated or pass away without an estate plan, you are leaving the distribution of your assets subject to state law and the care of your minor children subject to a court decision – and the results may not be at all what you want or expect.
Estate Planning Explained
Estate planning includes the growth, protection, and transfer of your wealth through the creation and maintenance of an estate plan. It also provides for the care of minor children in the event of your death. The concept of estate planning is important and twofold: (1) to have a strategy that will maintain your financial security during your lifetime, and (2) to ensure that your intended transfer of property and assets occurs upon your death, as well as your intended desires for your family. I analyze these issues through the lens of your unique family situation.
Benefits of Estate Planning
There are several benefits to having an estate plan. At a minimum, an estate plan provides clear written guidance to your loved ones on what to do with your assets when you are deceased. But perhaps the most important reason is to be in control of how your family is provided for in the event of your death or incapacity. Estate planning can address several issues including the following listed below.
- Who will raise your minor children?
- Who will inherit your assets and how they will be distributed?
- Who will care for loved ones who are unable to care for themselves?
- Who will care for your pets?
- Who will receive your life insurance and other insurance proceeds?
Finally, good estate planning can ease the time-consuming, administrative strain placed on your family during an already difficult time. Having a trust-based estate plan in place can help eliminate the need for probate.
Estate Planning Statistics
According to studies, 6 in 10 adults have not put a will in place. (https://www.aarp.org/money/investing/info-2017/half-of-adults-do-not-have-wills.html). And, while many have likely heard that it is wise to avoid probate – the legal process by which the assets of a deceased are disposed of under court supervision – many do not understand why probate should be avoided. Three main issues with probate include: (1) the tying up of assets for months or even years while the probate is open, (2) the cost, sometimes as much as 5 percent of the estate’s value is spent on attorney and court fees alone, and (3) the loss of privacy in the probate process when it comes to the decedent’s financial information.
There are many financial and legal tools that may be used in the estate planning process. Contact me today to discuss your situation and learn about your specific options.