Estate planning is not only for the elderly. Even if you don’t think you have any significant assets to protect, it could be beneficial to consult an estate planning attorney and discuss your options. If you know anyone who has had to deal with the loss of a loved one who didn’t have an estate plan they will probably tell you, in retrospect, that they wish they had made specific arrangements. There’s a reason why people say “Always be prepared!” Here are some major reasons why you should consider creating an estate plan today:
The main reason that many people create an estate plan is to avoid probate. Probate is the process of the administration and distribution of the estate of a deceased person. This legal process is typically carried out according to the person’s legal will. However, if the person does not draft a will the probate court will administer the person’s estate according to state statute. As a result of horror stories in the media of families dealing with probate, most people often want to avoid probate at all costs. Creating an estate plan is an effective solution.
Another good reason to consult an estate planning attorney about creating a plan is to reduce estate taxes and/or state inheritance taxes. Depending upon the individual’s situation, the payment of these taxes can account for a significant loss of an estate. Through simple planning you can make estate or inheritance tax much less burdensome or nonexistent.
Many times when people have personal experience, or witness someone, go through the process of dealing with the administration of a loved one’s estate they’re more likely to meet with an estate planning lawyer. Not having a plan in case you become mentally incapacitated or pass away can be overwhelmingly stressful for loved ones to deal with. Creating an estate plan is a proactive way to avoid family feuds and costly court proceedings.
One of the main reasons for creating an estate plan is to protect beneficiaries. Beneficiaries could be either minors or adults. When creating an estate plan with minor beneficiaries in mind you should appoint a guardian and trustee to oversee the minor’s finances until they are of age (either 18 or 21 years old, depending on the state in which they live). If the beneficiary is already an adult but has trouble managing money you should create an estate plan which will protect the beneficiary from their own bad decisions.