What is estate planning?
Estate planning is not just for the wealthy. Believe it or not, you have an estate. Your estate is comprised of everything you own, including your vehicles, home, other real estate, investments, bank accounts, and personal possessions. When you are gone, you probably want your assets to go to the people or organizations you care about the most. If you have minor children, you definitely want to pick the people who will raise them if something happens to you. You also do not want to burden your family with excessive taxes, legal fees and court costs. That is where estate planning comes in!
Good estate planning includes the following:
- instructions for passing on your possessions
- provisions for your care and the management of your affairs if you should become disabled before you die
- naming a custodian and guardian for your minor children
- providing for family members with special needs
- providing for loved ones who may need future protection from creditors or divorce
- minimizing taxes, court costs, and unnecessary legal fees
If you don’t have a plan in place, the law of your state will make that plan for you, and it will not always be beneficial to your loved ones. If you die without an intentional estate plan, your assets will be distributed according to the probate laws in your state. Typically, your spouse and children will each receive a share, but it might not be what you want. If you have minor children, the court will decide who will become their custodian and guardian, and your children will receive their share of your assets when they turn 18. Under some circumstances, your estate must go through the probate process, which can be costly, time consuming, and inconvenient. If you and your spouse should die at the same time and have not chosen a guardian for your children, the court will appoint one without any input from you. Wouldn’t you prefer to have a say in how these things get decided?
A typical estate plan involves a will and/or trust.
- a will provides your instructions for distribution of your assets, but does not avoid probate
- to avoid probate, most advisors recommend a revocable living trust for most situations. Such a trust can avoid probate at death, prevent court control of assets at incapacity, bring all your assets together into one plan, provide maximum privacy, is valid in every state, and can be changed by you at any time.
- Unlike a will, a trust does not have to die with you. Assets can stay in your trust, managed by the trustee(s) of your choice, until your beneficiaries reach the age you wish them to inherit. Your trust can continue longer to protect the assets from beneficiaries’ creditors, estranged spouses, and irresponsible spending.
None of us like to think about our mortality or the possibility that we may be unable to make decisions for ourselves. People put off planning for their estate because they think they don’t own enough assets, they have plenty of time to think about it, they are busy, or they are confused and don’t know who can help them. Failing to plan will force our loved ones to make very difficult decisions at a time of great stress and anxiety. Don’t wait!
You can put something in place now and change it later, which is exactly the way estate planning should be done. Your estate plan should be reviewed and updated as your family and financial situation changes over time. Knowing you have a properly prepared plan in place will give you and your family the peace of mind you and they deserve. This is one of the best things you can do for those you love.
The best time to plan your estate is now! Estate planning is for everyone, not just for the retired or wealthy.
If you live in Missouri or Kansas, give us a call (toll-free 1-877-704-7674) and talk to Attorney Aaron Johnson about planning your estate and preparing yourself and your family for the future!
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* In order to represent clients in states where the attorneys are not licensed, they must be granted admission pro hac vice or associate with local counsel.