Estate planning is unfortunately often seen as a rich person’s need. That’s simply not true. Three common reasons I get for avoiding an estate plan are: (1) I’m single; (2) I’m childless; or (3) I have nothing to pass on.
If you’re any of these, you still need a plan, but it may be very simple. You need to plan for incapacity. We live in an uncertain world and having basic documents like a power of attorney and an advance directive for medical care can remove the stress of haggling with doctors, banks, and other institutions you interact with from your loved ones or family if something unforeseen should happen to you.
Want to save money on attorney’s fees and court costs? Do an estate plan and consider a revocable trust. Transferring assets at death can be expensive if not properly prepared for. People (usually) aren’t trying to gouge your estate. However, it takes time and attention to detail to make sure your property goes to the right place while proving it to authority figures (such as a judge or compliance department at the bank) whose job is to prevent your estate from becoming a real-life episode of bad TV. You can reduce that expense with proper techniques, but only if you plan.
Don’t know who to give your property to? The law hates having property with no owner, so if you don’t plan for where your assets go, the law will do it for you. Have a pet? Check out pet planning https://www.trailheadep.com/news/2018/12/28/protecting-our-most-loyal-companions. Have family members who you don’t get along with? State law doesn’t care. Your estranged parent/child will be treated like your other family and take a share of your property if you die without a proper estate plan.
Don’t think you have any property? If you have any equity in your home, you have an estate. Been saving for retirement/contributing to your 401(k) or IRA? Got life insurance? You have an estate. If you have minor kids, they’re not property, but they’re your responsibility. If you fail to name a guardian, the State will do it for you. These are all excellent reasons to make an estate plan.
If you want advice on how to properly plan your estate—yes, even if you’re not an elderly millionaire with fighting kids—call or contact me today.
See you on the trail.
Post by Peter Harrison.