Some people think they do not have enough assets to need estate planning. The truth is even with a small to moderate estate, you may need an estate plan (will or trust) just as much as a wealthy person. An estate plan is a program for the distribution of your assets upon your death as well as planning for any periods of incapacity. It is also about having individuals designated to take care of your minor children should something happen to you. Planning for end of life decisions and financial planning are also concerns of estate planning.
Here are some aspects of estate planning that are important regardless of the size of your estate:
1. Protecting minor beneficiaries. This is a critical aspect of estate planning if you have minor children. If your minor child inherits assets from you without a will or a trust, it will be necessary for someone to petition the probate court to be appointed guardian of the child’s estate and a guardian of the child’s person. By having a revocable living trust, you can specify who should manage the child’s inheritance and how distributions should be made. You can stretch out the distributions over a number of years rather than have the child receive their inheritance at age 18.
2. Providing for “significant others” without marriage. If you are in a relationship, whether with an individual of the same sex or in a heterosexual relationship, your partner will not automatically receive a distribution from your estate without an estate plan. Your estate will be distributed to your heirs at law. Creating a will or trust insures that you can leave assets to your partner and that it can be your partner who will make decisions about life support and other end of life decisions.
3. Reducing the costs to your beneficiaries upon your death. If you pass away without an estate plan, your estate will have to be distributed through the probate process. Probate can be complicated for the lay person and in most cases, a probate attorney has to be hired to guide you through the process. Probate fees are statutory and come out of the estate before distribution. With a revocable trust, trust administration after the death of the Trustor is often less expensive than if the estate were probated. Additionally, with most trusts, the time to distribute the decedent’s assets is shorter than the time would be to probate the estate.
4. A properly prepared estate plan will also include documents which are important if you become incapacitated. If you are unable to handle your own finances, your agent under a power of attorney can step in and pay bills, invest assets, file taxes, and many other tasks until you recover. An advance health care directive can designate someone you choose to make decisions about your medical treatment while you are incapacitated.
The estate planning lawyers at Scott C. Soady, A Professional Corporation can help you create an estate plan that is tailored to your needs and your individual situation. We are happy to meet with you for a complimentary consulation.