There are many good reasons to create an estate plan. Anyone over the age of 18 needs at least some portion of one — even if it is just a simple will that outlines what you would want to happen upon your demise, and financial/ health care documents to protect you if you become incapacitated.
To Avoid Probate
Avoiding probate is the best reason to have an estate plan, and the most common reason people seek the advice of an estate attorney.
Everyone has heard horror stories about the probate system. If you die without a valid will or trust, your estate goes through the court system and will be governed by the applicable state’s “intestacy” laws. Suffice it to say, you wouldn’t be happy with how your assets are disposed of under these laws. In addition, the court system deals with incapacity using guardianships and conservatorships when there are simpler alternatives available.
Reducing Estate Taxes
For those who have estate tax liability, the results can be devastating. State and/or federal estate/inheritance taxes can erode more than 50 percent of the value of your estate.
By using proper estate planning techniques, these taxes can be reduced or eliminated.
Maintaining Family Harmony
Without a “road map” that outlines your wishes, even the closest families can become embroiled in arguments. No one wants to see family relationships eroded, sometimes permanently. Choosing someone to be in charge if you are mentally incapacitated and when you die can avoid costly family disagreements by facilitating WHO will get what, HOW they will get it and WHEN.
Protection of Beneficiaries
An estate plan can protect underage minors and prevent bad decisions, creditor problems, disability benefits and divorce. Minors need the designation of a guardian (and possibly a trustee), or the court will become involved.
Also, adults receiving government assistance for disability can potentially lose their benefits if they inherit assets, making an estate plan essential to their future.
All of these issues (and more) can be resolved by having a solid, legally binding estate plan in place.
Providing a Legacy
Many individuals want to leave something behind to a charity that meant something to them during their lifetime, and an estate plan is the perfect place to make gifts to organizations that are important.
Known as “planned gifts,” these can be as simple as a bequest in a will or trust, or more complicated irrevocable trust gifts. Planned giving serves our communities and shows our families valuable lessons about who we were, while saving on taxes and maintaining financial security of the estate.
Don’t Fret, Just Get Started Today
Only one-third of Americans have estate plans in place so don’t feel bad if you haven’t done any estate planning yet. It’s never too late to begin.
If you DO have one but haven’t revisited it in quite some time, now might be the perfect time to dust it off and make sure it still embodies your vision.
Do you have questions about estate planning, planned giving or the Sun Health Foundation? Please call 623.832.5330 or email us at firstname.lastname@example.org for additional information.