Do You Really Need Estate Planning?

As a homeowner, this is a question that everyone should ask of themselves. This can provide protection and eliminate stress for your loved ones, should you pass away. Having an estate plan can give you peace of mind knowing they will be taken care off if you become incapacitated or pass away. It is not pleasant to think about but it is good to plan for the worse and hope it will not have to come to that.

If you’ve never had a will or an estate plan or have done one a long time ago, now may be a good time to review your plan and make a new one.  Having an estate plan can save your loved ones time, money and unneeded stress in the future.

Do You Have an Estate Plan?

If you do not have an estate plan, it can cause your loved ones stress and affect them financially in the future.  You are not alone if you do not have one and it is very risky.  Without an estate plan, you are leaving the important decisions of what you leave behind after you pass away to the state.  This can leave your family at a disadvantage trying to figure out what you wanted to do with the things you left behind and how to handle your healthcare.  This leads to unnecessary legal costs, family disagreements, and even the wrong people making decisions on your behalf. 

Why Have An Estate Plan?

An estate plan is needed if you want to have control over:

• Who will inherit your assets?  Keep in mind that without a will, the state decides who gets what.
• Who will raise your children? 
  If you have children under 18, naming a guardian in your estate plan will make it known that they will be cared for by someone you know and trust.
• Who will manage your financial assets?  A power of attorney allows you to name someone you trust to make financial decisions if you are not able to.  Note that a power of attorney is someone that you assign to make decisions and sign documents on your behalf – if you are still living but not able to do handle them yourself.  I’ve seen this done when the person is not able to do it due to declining health.  Power of attorneys are used only if the person is still living. 

Is Your Estate Plan Up to Date?

Even if you already have an estate plan, estate attorneys recommend that you should update your estate plan every 10 years.  This is because of life changes, such as marriages, divorces, birth of a child or significant changes in assets.  These changes may require updates to your will, trusts, or other estate planning documents.

Ask yourself these questions:

• Has your family situation changed? If you have experienced a birth, death, marriage, or divorce then make sure you update your beneficiaries and guardians.
• Has there been a change with your financial assets? Changes to your homeownership, investments, and/or retirement accounts should be updated in your estate plan.
• Do you have adult children or grandchildren?  As your children grow up and you start to have grandchildren, it’s good to review your estate plan and update it accordingly,

The Risks of Waiting

If you pass away without having a will and estate plan, your family that you leave behind will go through a lengthy and expensive probate process.  Without a clear plan, disputes over assets and guardianship may arise, leaving your family in turmoil during a tough time.  I have seen firsthand how it can tear families apart. 

Creating a new plan or updating your estate plan does not have to be complicated.   To get started, contact an estate attorney licensed in your state.  They will send you documentation including a questionnaire for you to complete.  Then you will set up a meeting to review the questionnaire and other documents and they will find out what your wishes for the estate plan.  Then the attorney will draw up the estate documents to include your wishes.  Once the documents are drawn up, you will meet again to review them and make sure everything you desired was included.   Then it will be signed and witnessed, and an original set will be given to you for you to have in your possession.  The original is what you will need to have to submit for the probate process when the time comes, so make sure it is kept in a safe, and secure location – perhaps kept in a safe. 

Key Documents Included in an Estate Plan

1.  Will –this is the foundation of any estate plan, specifying who will inherit your assets and who will manage your estate. 
2. Power of Attorney – Select someone you trust to make financial and legal decisions if you are not able to do so
3. Medical Directive – also known as a living will, this document outlines your healthcare preferences if you become incapacitated and appoints someone to make medical decisions for you.  Hospitals and medical facilities will be asking for this document if the need arises. 
4. Trust – this document can offer greater control over how and when your assets are distributed, which is very helpful for children under 18, including those with special needs.  This document will also help family members who may need help managing their inheritance.

I hope this has given you more insight and information about estate planning and shown you how easy it is to get started.  If you need recommendation on an estate attorney, feel free to reach out to me at my email:  ccr@ccrsellsrealestate.com.

The information for this post was from M. Levan, Esq at Earp Cohn P.C.