What is Estate Planning?
Although some people think that estate planning is only for the ultra-rich, they couldn’t be more wrong. In fact, you likely already have an estate, regardless as to whether you’ve aware of it.
Your estate consists of many things, including but not limited to your vehicles, real property, your checking and savings account, investment accounts, retirement accounts and just about every other personally owned item you can think of.
It doesn’t matter how much you have (or don’t have), estate planning is something that should be considered.
You can’t take it with you
In live, we all have one thing in common. Everyone will eventually die. If you pass without leaving an estate plan, your wishes with regard to how your assets will be distributed may not be honored. What’s more, is that your estate could wind up in the hands of a probate court. Probate proceedings can take years to resolve and they’re often quite expensive. When you set up an estate plan you’ll be able to ensure that your legal fees, court costs and tax liabilities are minimized.
What’s included
When you establish an estate plan, you’ll be able too include instructions with regard to how you want your valuables and possessions distributed. For example, if you have college-age adult children, you can establish that your son or daughter will receive $X dollars per year for living expenses, and that $X will be available for them to use toward a down payment on a house. This will help give you peace of mind that the money will be spent wisely and responsibly.
You can also include information as to how you want your estate to be handled in the event you become mentally or physically disabled. Many people also choose to add a medical power of attorney to their estate plan.
If you’re unmarried and you don’t have a medical power of attorney, your parents and/or your adult children will likely be the ones charged with making medical decisions on your behalf. If you’re estranged from either, or you’re not comfortable with them making these types of decisions, you’ll want to make sure you have a medical power of attorney in place, which will allow a set designee to make medical decisions on your behalf in the event you’re unable to do so on your own.
Planning is important for everyone
It’s not uncommon for people to skip estate planning because they think they don’t own sufficient assets, but estate planning is something that everyone should take advantage of. If you pass without an established plan in place, your estate (regardless as to how large or small it might be) will wind up in probate, which comes with its own set of problems.
Remember: a will can help establish end-of-life instructions, but a will alone may not keep your estate out of probate.
If you have additional questions about the difference between establishing a will and setting up an estate plan, call The Law Network PC today to speak with a licensed attorney you can trust.
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