The reasons for needing an estate plan are as varied as the people involved and, it seems, the many myths surrounding the subject do quite a bit of harm. For example, do you have to be “rich” to need an estate plan? The answer is “No”, you don’t have to be rich to need an estate plan. You just need to have the desire to pass on to your heirs as much of the heritage as possible that you have kept during your lifetime.
Some of the key benefits of a well-drafted estate plan include minimizing the cost of transmitting your estate to beneficiaries, reducing administrative complexities, and ensuring, where possible, that your distribution wishes are respected.
For example, if you own a home, have minor children or grandchildren, adult children from their own marriage, are divorced, own a business, or plan to receive your own inheritance, you should seriously consider the benefits of good estate planning. Instead of passing the problems on to your heirs, you can instead choose to pass on the greatest amount of wealth with the fewest problems through estate planning.
The biggest hurdle, often, is establishing a lasting relationship with an attorney who specializes in estate planning. Browsing the yellow pages, asking friends for referrals, or using the Internet is often a haphazard process with little guarantee of success.
Compelling Reasons to Build an Estate Plan
Among the common motivations that compel the creation of an estate plan are the following. The more the following reasons apply to any situation, the more estate planning is necessary to not only build and protect your hard-earned wealth, but also to transfer your wealth with the least amount of depletion and expense possible. With a good estate plan in place, you can plan ahead:
1. Designate who will manage your affairs if you become disabled and upon your death. If you don’t, a court will decide for you not only who will receive your estate, but who will make the distributions. You never know who the court will appoint. Stay in control of your own destiny!
2. Medicaid planning and its impact on your estate if you have to go to a nursing home. Today, nursing homes can cost as much as $75,000 a year or more, and a long stay can easily impoverish all but the wealthiest families. With good planning, however, you can protect assets and keep your family’s wealth intact. Because there’s a 50% chance that an average adult will spend at least a year in a long-term care facility, it becomes painfully clear that this kind of planning is extremely important.
3. Avoid probate, during your lifetime and upon your death. Do you want the court to control you or your property? Type approval procedures are public, costly and time-consuming and should be avoided where possible. Leave your money to your heirs quickly, privately and efficiently by establishing an appropriate estate plan.
4. Protect children from a previous marriage if you die first. Planning a second wedding can be complex and tricky. Expert legal advice is needed to ensure that your assets are preserved and that your children from your first marriage receive their fair share of inheritance.
5. Protect assets inherited by your heirs from lawsuits, divorces and other claims. Make sure your assets are inherited by your loved ones, not by the people you don’t want to receive, like their ex-spouses, in-laws, creditors or the IRS.
6. Imposing discipline on children or grandchildren who may not be capable or experienced in wealth management. Make sure your children or grandchildren spend their inheritance wisely and protect their inheritance from inexperience and mismanagement by including specific conditions and rewards in your estate plan.
7. Caring for children and grandchildren with special needs. The loss of government benefits can wipe out your estate. Special considerations and planning are required to avoid the loss of government benefits.
8. Ensure that a specific portion of your estate actually goes to grandchildren, charities, etc. Without planning, a judge will decide who will inherit your property. Advance planning for your estate ensures that your intentions and guidelines are followed.
9. Protect part of your estate if you die first and your surviving spouse remarries. Special trusts, commonly referred to as “AB trusts”, can be created to protect your current surviving spouse and to ensure that your assets do not end up in the wrong hands. Act now to protect your family.
10. Meet the different needs of different children. No two children are the same. Personalized estate planning can ensure that each child’s personal needs are taken care of in the way you think is best.
11. Prevent or discourage challenges to your estate plan. Establishing a well-drafted and comprehensive revocable living trust now makes it harder to object when you are no longer there to speak on your behalf.
12. Encourage and reward your heirs who make smart life decisions and prevent the depletion of your estate by those who don’t. There may come a time when giving a child more money can make them less productive and less happy. A family incentive trust can be tailored with financial incentives that encompass your family values and goals to encourage and motivate your children. Such a trust can be a loving way to support your children while inspiring them to become productive members of society and boosting their self-esteem.
13. Provide education for children, or grandchildren, despite what they (or their parents) dream of doing with the inheritance. Establishing an educational trust can ensure that your children or grandchildren use their inheritance for education and not fund a Las Vegas vacation.
14. Plan a “Brady Bunch” family estate plan and make sure a step-parent doesn’t spend your children’s inheritance and/or support a spouse without sacrificing the intended inheritance for the children. children from a previous marriage. Divorce and subsequent marriage can have devastating effects on your inheritance for your children if your estate plan is not reviewed and updated. Often, the original “traditional” estate plan will not meet the needs or provide the necessary protection for your new blended family. Good planning is therefore imperative.
15. Pursue charitable goals that you might not otherwise feel you could afford. The dramatic reduction in probate fees also allows you to leave a legacy to a charity you admire.
If your wealth or disposition desires fall into any of the above groups, you should contact an estate planning attorney in your area. Often, waiting to make a decision on how to distribute your estate or to decide who can make decisions for you in the event of your death or incapacity will lead to the realization of your dreams for your children and grandchildren, or your charity. prefer. So, lingering over creating an estate plan can lead to extreme confusion, turmoil and expense for your heirs that can easily be avoided by contacting a highly qualified, trained and tested estate planning specialist in your area.