4 Reasons You Need an Estate Plan
Some people think they don’t need an estate plan because they’re not wealthy. That’s a dangerous misconception because there’s much more to an estate plan than saving money on estate taxes. Estate plans help minimize conflict after your death, and can also be useful if you become incapacitated during your lifetime. It’s important to speak to an experienced estate planning attorney about developing a plan that’s right for your family.
# 1 Reason: Minimize Conflict
If you die without a will or other type of estate plan, your assets will be distributed based on the laws in your state. Your spouse and/or children can find themselves at each other’s throats trying to get what they believe they are entitled to from your assets. There can even be disputes over assets with sentimental value that can cause great animosity and break families apart. A well thought out estate plan can minimize or eliminate these problems.
#2 Reason: Avoiding a Probate Proceeding
An estate plan that places your assets in a trust can avoid or minimize the need for a probate proceeding after your death. This will save your family time and money, and will also protect their privacy. A probate proceeding will make public the value of your assets, claims from creditors and the identity of your beneficiaries. A properly designed estate plan utilizing trusts, can arrange for all of your assets to transfer privately to beneficiaries.
# 3 Reason - Protecting Your Assets
If you can’t afford comprehensive long-term care insurance, your assets could be in jeopardy if you require residential care. Placing your assets in an irrevocable trust known as a “Medicaid Trust” can allow you to use your assets to pay for rent, food, vehicles, vacations and other amenities, while retaining eligibility for Medicaid. It’s important to set this up well before your need for long-term care arises to meet the requirements of the federal and state “look back” periods for Medicaid.
#4 Reason - Incapacity
It’s important to name a person to act on your behalf if you become temporarily or permanently mentally or physically incapacitated. The person you choose can make medical and financial decisions on your behalf, including the following:
Paying bills
Signing tax returns
Managing health care providers and treatments and
Following your wishes concerning life extending interventions.
Planning for your incapacity will empower your family members to carry out your wishes and avoid disputes about your wishes.
These are just some of the reasons you should consider making an estate plan. An experienced estate planning attorney can help you create a plan that’s right for your family.
