As we discussed in our September blog, there are many individuals who choose to forego the use of both an estate plan and an estate planning attorney. In honor of National Estate Planning Awareness Week, here are some additional reasons the use of both is highly recommended.
There are many excuses individuals use to not create an estate plan. Some of the most common include:
- I am not that old
- My spouse and I both own the property, so when I pass it will all go to them
- I don’t really have a lot of money so I don’t need a plan
- It is too expensive
- When I die, the government will help divide my assets
- We did this 10 years ago, we don’t need to revisit it again
Unfortunately, if you are clinging to any of these reasons, your family could be very surprised when they try to divide up your estate upon your passing.
Consequences of inadequate estate planning
An estate plan allows you to develop a solid strategy for the transfer of assets to your heirs upon your death. If you decide not to create an estate plan, your family will end up in probate court, which can be very time-consuming and costly. In this process the court will oversee the distribution of your assets to both your heirs as well as any creditors to which you might have outstanding debt. The distributions are made regardless of your wishes, and your heirs will be subject to estate taxes on whatever they receive. The best way to avoid probate is to create a revocable trust so you can transfer ownership of all your assets to the trust. The trust will include all your wishes regarding what should happen if you become incapacitated or pass away.
I already have a plan
Just because you created an estate plan earlier in life, does not mean it never needs to be updated. Changes in your circumstances or the law could mean the plan you worked so carefully to create will no longer be valid. It is important to revisit the document from time to time to ensure that it is still appropriate for your needs.
Too expensive and not enough assets
Failing to create an estate plan can often be more expensive than putting one together. If you have minor children, you should appoint a guardian to care for them if both parents die. It is also important to determine a power of attorney should you be unable to make your own decisions. Additionally, estate plans are not just for those with considerable wealth. Depending upon the state laws, assets as small as $51,000 could go through probate without an estate plan.
Even armed with this information, there are a lot of other details that need to be taken into consideration as you are creating an estate plan. This is why having an estate planning attorney guide you through the process is crucial. Contact the estate planning experts at McLario, Helm, Bertling & Spiegel to develop a personalized estate plan for your unique needs.