Do You Need an Estate Plan?

Estate Planning is for Everyone!

By Kristen A. Campbell

Estate planning isn’t only for the wealthy or the old. Even the young and those with modest means need to be thinking about how their assets will be distributed in the event of a tragedy.  Estate Planning is the process of planning for the administration of your affairs in the event of your disability, incapacitation or death.  An estate plan helps to remove the uncertainties after your death allowing your loved ones to administrator your estate without conflict. A good estate plan can also avoid the necessity of your loved ones having to go to court. Finally, it may also help reduce taxes and other expenses prior to death in order to increase the value of the overall estate upon your death.  Estate planning is individual to each person and is used to meet each individual’s specific goals.  You need an estate plan if you wish to:

  • Protect yourself and your family.  If you are the parent of young children, your Will allows you to specify who will raise your children if you pass away while they are young. Without a Will that names a guardian, the courts will step in to determine who will care for your children. 

  • Decide who makes decisions for you when you can’t.  Estate planning includes planning for the possibility of your own mental or physical incapacity. Advance Directives enable you to decide in advance about life support and to select someone to make decisions for you about medical treatment. Also, financial powers of attorney enable you to provide for the management of your financial matters and assets should you become unable. Without these documents,  decision-making about your welfare will be made by a court-appointed representative according to state law without your guidance.

  • Give what you have to whom you want when you want.  An estate plan allows you to specify family members and friends as your beneficiaries.  Without an estate plan, state law decides who will receive your assets.  Further, the disposition of certain assets may require special knowledge, skills and attention. For example, as part of the estate planning process, you can provide for the continuation of the business's affairs by spelling out what will happen to your interest in the business. Also, your valuable collections may require special knowledge and attention.  Or, you may simply want to designate that your sentimental belongings go to the person who would appreciate them.  

  • Minimize taxes and professional fees.  The significant loss of one's hard earned assets to the payment of state and/or federal estate taxes is a reason for many people to put an estate plan together.  The estate plan process can help you develop an approach to do so in the most tax-efficient way possible.

If you have not created an estate plan yourself, your “plan” is made up of several statutes, rules and contract provisions that you may not know.  Having a solid foundation in place could mean less hassle and heartache for those you care about.