What is an Estate and Do I Have One?
You probably have an estate — nearly everyone does. An estate is everything you own and may include your car, house, business, other real estate, checking and savings accounts, stocks, bonds, life insurance, jewelry, artwork, furniture, and variety of other personal possessions. Regardless of the size of your estate — how much “stuff” you’ve accumulated over the years — you can’t take it with you to the grave.
Estate planning is for everyone, not just the rich, elderly, or ill. Many individuals put off estate planning because they think they don’t own enough stuff. However, good estate planning often means more to families with modest assets, because they can afford to lose the least.
What is Estate Planning?
Estate planning is a process where you control how your “stuff” is distributed during your lifetime and after your death. Your estate plan provides instructions that identify whom you want to receive something of yours, what you want them to receive, and when they should receive it. However, a good estate plan consists of much more than that. It should also:
- Include instructions for your care if you become disabled or incapacitated.
- Name a guardian and an inheritance manager for minor children.
- Provide for family members with special needs without disrupting government benefits.
- Provide for loved ones who might be irresponsible with money or who may need future protection from creditors or divorce.
- Include instructions for passing your values (religion, education, hard work, etc.) in addition to your valuables.
- Provide for the transfer of your business at your retirement, disability, or death.
- Include life insurance to provide for your family at your death, disability income insurance to replace your income if you cannot work due to illness or injury, and long-term care insurance to help pay for your care in case of an extended illness or injury.
- Minimize taxes, court costs, and unnecessary legal fees.
- Be an ongoing process, not a one-time event. Your plan should be reviewed and updated as your family and financial situations (and laws) change over your lifetime.
What Happens if I Don’t Have an Estate Plan?
Without an estate plan, if you cannot manage your affairs due to mental or physical incapacitation and your name is on title of your assets, a court appointee, not your family, will control how your assets are used to care for you through a conservatorship.
Without an estate plan when you die, your assets will be distributed according to the probate laws. If you have children and both parents die (i.e., in a car accident), the court will appoint a guardian for your children without knowing whom you would have chosen.
When Should I Start Thinking About an Estate Plan?
The present time is the best time. Get started now. While none of us like to think about our mortality or the possibility of being incapacitated, this is why so many families are unprepared when incapacity or death does strike. Start now and get something in place. You can change it later…which is exactly the way estate planning should be done.
Knowing you have a plan in place that contains your instructions and will protect your family will give you peace of mind. Contact us today and let’s get you started.