A common misconception about estate planning – the area of law that covers wills, trusts, and probate – is that you don't have to think about it unless you're really wealthy. In other words, if you only have a few thousand dollars in a savings account, live in a rented apartment, and drive a car that you still owe money on, what's the point of doing that kind of planning?
While it may be true that, in some cases, estate planning is not your highest priority, how much money you have is only one determining factor out of many. There are a lot of decisions that have to be made when you pass away, and plenty of good reasons you should make them in advance. Often, the most important benefit of taking these steps is simply that it will make life easier on your family. That’s important.
Indeed, I would advise anyone with assets valued at more than $150,000 to see an estate planning attorney. And remember, assets include everything you own that has monetary value, not just the money in your bank accounts. Your assets also include items such as:
The equity in your home
Investments, like stocks, mutual funds, and land
Retirement accounts
Vehicles and boats
Rare or valuable collectors’ items
In addition to your financial wealth, there are other circumstances you may have that can be taken care of in advance. If any of these apply to you, it’s important to seek out qualified legal advice from an estate planning attorney.
You have dependent children or loved ones with special needs.
Most people understand that if they have children under the age of 18, they need a plan that determines who will care for their children if they pass away unexpectedly. Typically, most parents designate their own parents or an adult sibling. However, what would happen to your child if he or she is over 18 but is still dependent on you because they have special needs? This not a matter you want to leave up to the courts.
You have a blended family that includes children from previous relationships.
In a blended family, if one of the parents passes away, their children would simply go back to the other parent. But what if that other parent has not been involved in the child’s life and that's not who you want your children to go to? Or, the other parent may be deceased. Without a will, some other relative of the deceased parent may try to take that child from the only family they know, even if it’s a blended one.
You are concerned about what will happen if you become ill or incapacitated.
If you're unable to make important decisions, especially healthcare-related ones, due to an illness or injury, who do you trust to make them on your behalf? Someone also has to manage your finances and pay your bills when you can’t. It makes a lot of sense to determine in advance who will fill that role, as well as making sure they are willing to accept the responsibility.
You own a business.
When you own a business, your decisions affect not only you and your family, but your business partners and employees as well. If you pass away, there’s more at stake than who will inherit the ownership of the business. By seeing an estate planning attorney, you have an opportunity to work with your business partners in deciding who will control the business moving forward. This ensures that you protect your family, your partners, and your employees.
You would like some of your assets to go to charity.
This is a great way to leave a meaningful legacy. For example, you may have a strong passion for what your church does in your community and want to support that work financially. Or, you may be a contributor or volunteer with a non-profit organization and want to continue supporting the work they do. If you include these desires in your estate plan, as opposed to simply asking your heirs to make the donation after the estate is settled, it ensures that your wishes will be followed and is less of a burden on them.
Finally, an important benefit of handling your estate planning in advance, which is often overlooked, is that it can be done in a way that keeps details about your assets and finances out of the public record. Remember, probate is a legal process that goes through the courts, and matters of the court are almost always publicly available. If this is not acceptable to you and your family, your estate can be set up in a way that maintains your privacy after you pass.
If you have questions about these how estate planning may apply to you and your family, or would like to talk to a qualified estate planning attorney, contact Nexus Legal Solutions at 407-900-7722 for a consultation.