Do You Need an Estate Plan?
Whether it’s a simple will and account beneficiaries, or a complex plan, chances are good that you need an estate plan to protect what you hold dear. Thinking about your own mortality is admittedly difficult. But developing a clear plan that outlines your wishes can be an anchor in your loved ones’ sea of grief. Not only is your plan a practical guide, but it also helps preserve the value of your assets.
Before you decide you’re too young, too healthy, or own too little to need an estate plan, consider the following questions:
Are you married?
Do you have children?
Are you married with children from a previous marriage?
Are you divorced?
Do you own a business?
Do you desire you estate to be distributed in a particular manner?
Are you caring for your aging parents?
Do you care for someone with special needs?
If you answer “yes” to any of them, then you need an estate plan to protect your heirs and your assets.
You’re married
If you’re married, there’s a good chance your wish is to leave everything to your spouse. Drafting a will is an excellent place to start. Your assets aren’t the only matters to consider, however. Talk to your spouse, and establish plans for your funeral and burial plans (and related expenses), income for your spouse, and decision making regarding your health care if you’re incapacitated or otherwise unable to make decisions about your care. Also be sure your spouse knows where to find details about all of your accounts, including usernames and passwords.
You’re a parent
The arrival of children is often what prompts people to draft wills, if only to make clear their wishes for their children’s care and upbringing. Consider also how to pay for your kids’ ongoing care, and who will make decisions about the funds. Some families opt to put one relative in charge of the kids but another in charge of the money. Also consider what happens if the guardian you’ve identified passes before you do, or if your sibling gets divorced and is no longer willing or able to raise your kids in your absence? Be sure your estate plan also includes a Plan B for circumstances like these.
You’re divorced
Surprised by this one? It’s a situation that can get messy, if you don’t have up-to-date plans in place. At one time, your life was financially and legally bound to your former spouse. If you haven’t changed your beneficiary designations or business succession plans, guess who gets some or all of your estate? Your ex. If kids are involved, it’s even more important to be sure your plans are clearly stated, for their benefit.
You’re a business owner
What will happen to your business when you’re gone? Talk to your family, business partner, and other stakeholders to define - and put your wishes in writing. Ownership is a big concern, and day-to-day management is another. Succession planning is a big topic to cover; now, simply be aware that as a business owner, you need an estate plan that includes your business.
You own a large estate
We won’t try to define “large” here, but if you have high net worth, there’s a good chance your estate has some complexity - and that survivors may have a motive to fight over their fair shares. Plus, depending on where you live, your estate could be heavily taxed as it passes to the next generation. Putting an estate plan in place can both reduce those taxes and reduce legal battles between your heirs. Privacy is another consideration, as your heirs may not wish for your (and their) business to be made public after your death. You can keep your financial affairs out of the public eye with an estate plan, which will also allow you to avoid the long wait of probate.
You have aging parents
As a parent, you need to outline plans for your children when you pass. As the caretaker for aging parents, you need to do the same thing. From living expenses, to managing their finances, to making decisions about their care, you don’t want to leave these things up to chance. An estate plan gives you the opportunity to care for them, even when you’re gone.
You have a child with special needs
If you have a child with special needs, your situation is nuanced. You’ll want to leave plans to cover their living expenses and health care, without jeopardizing their eligibility for any governmental support they need. Plus, as with any children, you’ll want to make plans for their guardianship, living arrangements, education and long-term care, with clear instructions to cover their unique needs.
Start your estate plan now
If it wasn’t clear before, we hope it is now - estate planning is for everyone. Contact us for a consultation and to begin or update your plans.