Why Everyone Should Consider an Estate Plan

Many people believe that estate planning is only for the wealthiest among us and fall into the trap of thinking that they don’t have enough assets to need an estate plan. After all, why spend money for an attorney to draft a plan when everything will go to your spouse, children, etc. anyway? What we have found through involvement in countless estate planning and administrative matters, however, is that things don’t always go as planned following death, which often leads to stress and expensive probate fees. Here are some of the key benefits an estate plan can provide, regardless of wealth.

• Taking Care of Minor Children. If both parents pass away when their child is under the age of eighteen, the court will appoint a guardian to care for the minor until they reach the age of majority (18). You can influence the court’s decision of who will be appointed guardian by nominating a specific person in your Will based on your intimate knowledge of your child and that person. If you don’t appoint anyone, the court will be forced to draw its own conclusions about who would be best situated to care for your child.
• Setting Up Trusts for Children. If you do not set up an estate plan that includes holding assets for your children after your death, court proceedings will be necessary to appoint a conservator to manage your property for your child until the child reaches age 18. When your child turns 18, all of the assets, which may include retirement accounts, life insurance proceeds and your home, would then be distributed to your child outright. Setting up a plan for a trust for your child, which can be done within your Will, allows you to choose a trusted individual who will serve as a trustee and manage the assets for your child according to the instructions in your plan. It also allows you the option to include a gradual schedule for distributions as your child matures rather than distributing all of the assets at once when your child turns 18.
• Easing (or Completely Avoiding) the Probate Process. Without an estate plan, your property will likely be distributed through a process called probate upon your death. Probate can be a costly, time consuming, and mind-numbing ordeal, and it will require your personal representative to go to court to administer your estate. Some planning techniques, such as revocable trusts, are specifically designed for probate avoidance. This strategy isn’t for everyone. If you choose not to use a trust-based plan, although a Will won’t avoid probate, it can provide for a much smoother probate process.
• Avoiding Conflicts Between Loved Ones. Most parents believe that their children or beneficiaries will not fight over their estate. However, far too often the passing of a parent or other loved one can lead to a high conflict situation. Parents often act like keystones within a family arch. With the keystone, the arch is able to support a great deal of weight. However, upon the removal of the keystone, even the slightest weight or strain can cause the once strong arched wall to fail. Often resentment between family members once buried to keep the peace around mom and dad become vocalized during the estate administration process. Losing a loved one creates a difficult and emotional situation, and it is important to plan to help the process go as smoothly as possible. The role of an estate planning attorney is to help you create a plan which will limit intra-family conflict using thoughtful distribution plans and nominating trusted fiduciaries.
• Planning for Incapacity. At some point, you may find yourself unable to manage your finances, property, or physical self due to incapacity. Without prior planning, the court may be forced to set up a guardian and conservatorship without your consent or input, which will cause you to lose the ability to participate in medical or financial decisions for yourself. Advanced planning can help lessen the need for such court proceedings and can allow you to choose a trusted individual who make decisions for you pursuant to your wishes.