I’m not wealthy, after all. I have a home, some savings and an investment account, and a modest retirement account. Isn’t estate planning for the rich? Do I really need an estate plan?
There are actually a number of very good reasons to plan.
- YOUR FUTURE SHOULD BE GOVERNED BY YOUR RULES. Without planning, you won’t be able to choose who gets your property and how. The state will make all of those decisions for you. The state and the courts don’t know which of your heirs may be responsible and able to handle the receipt of your property and which may need to be protected from their own immaturity, a bad marriage, financial problems, or other difficulties. We believe you are best suited to determine who should inherit from you, the safest way for them to receive it, and when that should happen.
- PLANNING PROTECTS YOUNG CHILDREN. Planning protects young children or grandchildren. None of us likes to think about dying prematurely, but we all know it can happen. If you have young children, it will be important to appoint their guardian and choose who will manage their money until they are able to handle their own finances. In the same way, if you have an adult child who predeceases you, it will be important for you to protect your grandchildren from being taken advantage of, or wasting, their parent’s share.
- PLANNING PROTECTS AGAINST DISABILITY. As we live longer, the odds increase that we may one day be disabled. Proper planning allows you to control who, during those periods of disability, will be in charge of caring for your needs and using your property for your care. Without pre-planning directions from you, a judge may be required to take over your property through a guardianship proceeding. Guardianships are public, excessively expensive and wasteful of your property, and the worst possible way to see to your care.
- PLANNING CAN HELP PREVENT FAMILY STRIFE. Leo Tolstoy, in the first line of Anna Karenina, wrote this: “Happy families are all alike; every unhappy family is unhappy in its own way.” Attorneys who have handled probate cases all have their horror stories over families that fight over a loved one’s money. We certainly do, and there is nothing more tragic. The more clearly your plan reflects your wishes and clear instructions, the less likely family conflict becomes.
- PLANNING CAN SAVE TAXES. Proper planning can save or eliminate inheritance taxes. But even for modest estates, an estate plan can minimize your heirs’ income taxes and preserve their step-up in basis for the property they inherit. Without a plan, your children may be hit with a much larger tax bill.