Far too often, people will assume that they do not need an estate plan. This is because they believe that estate plans are for seniors or for those with millions in assets. Neither one of these beliefs is true—everyone needs an estate plan. And the sooner you get started on creating one, the more benefits you can reap.
In this article, we’ll discuss exactly why estate planning is important. Most importantly, we’ll discuss what you can do to get started.
What is Estate Planning?
First off, let’s define what estate planning is. Think of an estate plan as a plan of action that helps your family distribute the assets you own. Instead of leaving the decision to the state courts, you can make those decisions for your family now. This saves your family the hassle and confusion of trying to manage your assets later on.
An estate plan can be anything from a living will to an irrevocable trust. Without an estate plan in place, your assets may be seized, or take years to reach your family.
Estate plans leave directives for trustees, beneficiaries, and executors (of a will), and can even be paperless to protect your digital assets as well.
Why is Estate Planning Important?
Estate planning is the best way to prepare for the unexpected. It outlines what should happen to your assets in the event you become incapacitated or pass away.
Let’s say someone you know and love becomes gravely ill. She is a single mother of three (widowed) and passes away in the hospital.
You are called in to make major decisions on her behalf. How will you know what to do? What will happen to her house and kids?
As you can see, this is a situation that requires immediate action. There are children involved, and a full estate to organize. She did not plan on getting sick. No one ever does. Thankfully, she had an estate plan so you can know what to do.
In this scenario, her estate plan might answer the following questions:
- Who will take care of her kids?
- Who will manage her money?
- At what age are the children allowed to claim their inheritance?
- What will happen to the house until the children come of age?
- Does she intend to sell the house or keep it for the children to share?
- If she intends to keep it, is the house paid off? If it is, how will the taxes be paid?
These are just a few examples of common questions an estate plan can help a family answer. In the event something goes wrong, they can know just what to do.
Estate planning is important because it gives your family a blueprint. Without it, chaos ensues, and even the smallest of problems become enormous issues.
How Can I Plan My Estate?
Now that we’ve explored some of the reasons why estate planning is important, you might be wondering what you can do to ensure your family’s protection.
Planning your estate doesn’t need to be difficult, time-consuming, or costly. In fact, there are many low-cost options available across the West Coast and Midwest.
There are a number of options available, including several wills and trusts. However, the very first step would be to contact a lawyer.
To learn more about estate planning, contact our attorneys today.
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