Unfortunately, it’s very common for people to decide to meet with an estate planning lawyer only after seeing the trouble caused after a loved one’s failure to create an estate plan. Having a plan in place ahead of time can make difficult situations much less painful for everyone involved.
So why is it that so many people still avoid creating an estate plan? Aside from the obviously morbid and sometimes unsettling discussions the process requires, many assume that estate planning is too time-consuming and/or expensive. However, setting up an estate plan isn’t quite as complicated as it may seem. Estate planning might be as simple as adding a new beneficiary to your insurance policies, and other assets, or drafting wills and trusts to ensure that all of your last wishes are carried out appropriately.
For those who don’t already have a plan in place, we’ve put together a shortlist of some of the reasons why asset protection planning is so crucial for you and your loved ones.
1. PROTECTING BENEFICIARIES:
Protecting minor beneficiaries is one of the most important reasons that people should consider establishing an estate plan. Every state has laws that require an appointed guardian or conservator to manage a minor’s needs until they become a legal adult at age 18 or 21, depending on the state in which the minor lives.
Folks often assume that their family members will handle their affairs appropriately according to wishes that have been verbally communicated. Unfortunately, it does not always work out that way in times of distress. Taking the time now to designate a trustee for your minor beneficiaries will help prevent disagreements among family members and unnecessary legal expenses after your death.
A comprehensive estate plan will also help protect any of your adult beneficiaries from making poor financial decisions and avoid problems with creditors or overbearing partners that you fear may waste the inheritance or take it in a divorce.
2. REDUCING ESTATE TAXES:
Estate plans are also a great way for people to help curb the loss of value in one’s assets to state and/or federal inheritance or estate taxes. Married couples can reduce and even potentially eliminate estate taxes through basic financial planning strategies and by setting up trusts as a part of their wills. Additionally, an estate planning lawyer can advise both married couples and individuals on a variety of advanced estate planning techniques to minimize or completely eradicate a potentially hefty estate tax bill.
3. AVOIDING PROBATE:
Avoiding probate is definitely one of the most common reasons why people decide to take the time to create a solid estate plan. Without one, the fates of your assets and your loved ones will most likely be decided by attorneys or state and/or federal officials that don’t know you or your family. Probate court is expensive, painfully public, and can delay the transfer of inheritance for several months or longer at a time when your heirs need it most. While most people have never even dealt with probate, several horror stories highlighted in the media has made it common knowledge that we want to avoid it at all costs.