Why Estate Planning Is Important (and Why You Need to Start Now)
If you have kids, run a business, or just hate surprises, you know the intolerable wait-and-see feeling when a situation is out of your hands. Yet, many people who suffer frustration and panic when things are beyond their control put off completing one of the most important aspects of their lives. Let’s explore the benefits of estate planning at any age, highlight essential documents, provide practical tips, and answer common questions about the process.
[TABLE OF CONTENTS]
- The Benefits of Estate Planning at Any Age
- Key Documents for Estate Planning Success
- Estate Planning Tips
- Common Estate Planning Questions
- Create Your Personalized Estate Plan Today
The Benefits of Estate Planning at Any Age
Estate planning often conjures images of retirees or the ultra-wealthy. In reality, everyone—regardless of age, income, or family situation—should have an estate plan.
No matter when it is created, an estate plan has the power to:
- Protect minor children. Your estate plan names the guardian(s) of your choosing who will raise and care for your underage children.
- Prevent family disputes. By providing clear instructions and explaining your wishes in writing, you can avoid costly conflicts among your heirs.
- Minimize taxes. Certain planning structures can minimize estate taxes levied on your property, allowing your family to inherit more assets.
- Avoid probate delays. Some assets may pass outside of probate, transferring directly to heirs without taxation or the months-long court process.
- Provide peace of mind. Life is unpredictable, and estate planning is an easy and rewarding way to protect your loved ones, preserve your assets, and honor your wishes in the event of incapacity or death.
Key Documents for Estate Planning Success
Last Will and Testament
What It Is: A Will outlines how your assets will be distributed and who should care for minor children. It simplifies the estate administration process for your loved ones.
What Happens If You Don’t Have It: If you die without a Will (intestate), your estate goes through probate, and the court will decide how your assets are distributed. This can be time-consuming, expensive, and may not align with your wishes.
Financial Power of Attorney
What It Is: This document authorizes someone to manage your financial affairs if you’re incapacitated.
What Happens If You Don’t Have It: Your loved ones may have to go through a lengthy court process to file your taxes, take control of your bank accounts, and pay your bills.
Living Will
What It Is: An Advance Directive, also called a Living Will, expresses your choices for treatment and appoints the person (healthcare proxy) who can make medical decisions on your behalf.
What Happens If You Don’t Have It: If your medical record and estate plan don’t contain a written statement of your end-of-life treatment wishes, your family members will have to make difficult choices without your guidance. If no healthcare proxy has been named, family members may have conflicting views of treatment or fight for the right to make decisions by petitioning the court for medical power of attorney.
Revocable (Living) Trust
What It Is: A living trust avoids probate by “owning” certain assets transferred into the trust during your lifetime. You maintain control, and upon your death, the successor trustee distributes trust assets according to your instructions.
What Happens If You Don’t Have It: If assets aren’t properly transferred into a trust, they must go through the lengthy and costly probate process.
Estate Planning Tips
Estate planning can feel overwhelming, but these tips can help simplify the process:
- Start Early! Don’t wait until a major life event or health issue forces the conversation. Planning ahead gives you more control and less stress.
- Avoid Ambiguity. Be specific about which assets go to whom, but also your intentions behind the decision. Basic transparency can help avoid confusion or conflict later.
- Consider Your Legacy. Estate planning isn’t just about wealth. Include instructions for your digital accounts, charitable donations, funeral wishes, and personal values.
- Update Regularly. Review your plan every few years or after significant events like marriage, divorce, birth of a child, or a major financial change.
- Work With a Professional. An experienced estate planning attorney can ensure your documents are legally sound and tailored to your situation.
Common Estate Planning Questions
Can I change my estate plan?
Yes, you can make updates to your estate plan at any time. You should review your plan every 3 years or so to make sure it reflects your current wishes. If you want to correct outdated information or add contingencies, you may need a lawyer to add a codicil or create a new plan.
Why is life insurance important to estate planning?
Life insurance proceeds bypass the Will and go directly to named beneficiaries a few weeks after death. Funds from these accounts are often used to pay for funeral and burial costs and the deceased’s final bills. In some cases, retirement and life insurance can make up the bulk of an estate, so the named beneficiary can make or break the family’s financial future.
Where should I keep my estate plan?
Ensure your executor and beneficiaries know where to find your estate planning documents. Don’t hand copies out willy-nilly, but don’t keep the location so secret that they cannot be found after you’re gone. Depending on your assets, you may want to keep your estate plan with your attorney.
Create Your Personalized Estate Plan Today
Estate planning is not just a financial strategy—it ensures your loved ones are protected, your wishes are honored, and your legacy is preserved. No matter your age or the size of your estate, taking the time to plan today can save your family from unnecessary heartache tomorrow. Call or email us at hello@yolofskylaw.com today to get started.