Estate Planning is for everyone - not just 'retired' people or 'the wealthy.' To gain a better understanding, we wanted to share this helpful information with you that can be found on estateplanning.com:
What is estate
planning?
Simply put, making a plan in advance and naming whom you
want to receive the things you own after you die.
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Estate planning for all.
It is not just for “retired” people, although people do tend
to think about it more as they get older. Unfortunately, we can’t successfully
predict how long we will live, and illness and accidents happen to people of
all ages.
Estate planning is not just for “the wealthy,” either,
although people who have built some wealth do often think more about how to
preserve it. Good estate planning often means more to families with modest
assets, because they can afford to lose the least.
If you don’t have a
plan, your state has one for you, but you probably won’t like it.
At disability: If your name is on the title of your assets
and you can’t conduct business due to mental or physical incapacity, only a
court appointee can sign for you. The court, not your family, will control how
your assets are used to care for you through a conservatorship or guardianship
(depending on the term used in your state). It can become expensive and time
consuming, it is open to the public, and it can be difficult to end even if you
recover.
At death: If you die without an intentional estate plan,
your assets will be distributed according to the probate laws in your state. In
many states, if you are married and have children, your spouse and children
will each receive a share. That means your spouse could receive only a fraction
of your estate, which may not be enough to live on. If you have minor children,
the court will control their inheritance. If both parents die (i.e., in a car
accident), the court will appoint a guardian without knowing whom you would
have chosen.
Given the choice—and you do have the choice—wouldn’t you
prefer these matters be handled privately by your family, not by the courts?
Wouldn’t you prefer to keep control of who receives what and when? And, if you
have young children, wouldn’t you prefer to have a say in who will raise them
if you can’t?
An estate plan begins
with a will or living trust.
A will provides your instructions, but it does not avoid
probate. Any assets titled in your name or directed by your will must go
through your state’s probate process before they can be distributed to your
heirs. (If you own property in other states, your family will probably face
multiple probates, each one according to the laws in that state.)
Not everything you own will go through probate.
Jointly-owned property and assets that let you name a beneficiary (for example,
life insurance, IRAs, 401(k)s, annuities, etc.) are not controlled by your will
and usually will transfer to the new owner or beneficiary without probate. But
there are many problems with joint ownership, and avoidance of probate is not
guaranteed. For example, if a valid beneficiary is not named, the assets will
have to go through probate and will be distributed along with the rest of your
estate. If you name a minor as a beneficiary, the court will probably insist on
a guardianship until the child legally becomes an adult.
For these reasons a revocable living trust is preferred by
many families and professionals. It can avoid probate at death (including
multiple probates if you own property in other states), prevent court control
of assets at incapacity, bring all of your assets (even those with beneficiary
designations) together into one plan, provide maximum privacy, is valid in
every state, and can be changed by you at any time. It can also reflect your
love and values to your family and future generations.
Unlike a will, a trust doesn’t have to die with you. Assets
can stay in your trust, managed by the trustee you selected, until your
beneficiaries reach the age you want them to inherit. Your trust can continue
longer to provide for a loved one with special needs, or to protect the assets
from beneficiaries’ creditors, spouses, and irresponsible spending.
A living trust is more expensive initially than a will, but
considering it can avoid court interference at incapacity and death, many
people consider it to be a bargain.
Planning your estate
will help you organize your records and correct titles and beneficiary
designations.
Would your family know where to find your financial records,
titles, and insurance policies if something happened to you? Planning your
estate now will help you organize your records, locate titles and beneficiary
designations, and find and correct errors.
Estate planning does
not have to be expensive.
If you don’t think you can afford a complex estate plan now,
start with what you can afford. For a young family or single adult, that may
mean a will, term life insurance, and powers of attorney for your assets and
health care decisions. Then, let your planning develop and expand as your needs
change and your financial situation improves. Don’t try to do this yourself to
save money. An experienced attorney will be able to provide critical guidance
and peace of mind that your documents are prepared properly.
The best time to plan
your estate is now.
None of us really likes to think about our own mortality or
the possibility of being unable to make decisions for ourselves. This is
exactly why so many families are caught off-guard and unprepared when
incapacity or death does strike. Don’t wait. You can put something in place now
and change it later…which is exactly the way estate planning should be done.
The best benefit is
peace of mind.
Knowing you have a properly prepared plan in place - one
that contains your instructions and will protect your family - will give you
and your family peace of mind. This is one of the most thoughtful and
considerate things you can do for yourself and for those you love.
Birmingham Estate Planning Attorney Richard Burton provides legal services in Estates, Wills & Trusts, Probate Administration, Guardianship and Conservatorship, Asset Protection Planning, Business Succession Planning, Federal & State Tax Planning, Charitable Giving & Private Foundations. Contact Richard at www.attorneyrichardburton.com or call (205) 789-9894.
Birmingham Estate Planning Attorney Richard Burton provides legal services in Estates, Wills & Trusts, Probate Administration, Guardianship and Conservatorship, Asset Protection Planning, Business Succession Planning, Federal & State Tax Planning, Charitable Giving & Private Foundations. Contact Richard at www.attorneyrichardburton.com or call (205) 789-9894.