More times than I care to count, I hear this statement from people; “I don’t have anything so I don’t need to do any estate planning right now.” This is a major misconception about estate planning and it permeates not only through the young community but also with seniors as well. Below, I will outline a few reasons why people should plan their estates and also a few methods by which this can be achieved.
Reason # 1: Guardianship nominations for minor children.
Reason # 2: Avoid probate. Estates over $150,000 must be probated- a public court process to administer the estate- unless the estate is covered by a non-probate instrument such as a trust or joint tenancy.
Reason # 3: Lessen the chance of familial discord. Money changes people so don’t assume that your family will be on their best behavior after you are no longer there to keep them in line.
Reason # 4: Make provisions for the management of your health and/or property in case of incapacity.
These are just four of the most common reasons that people should plan their estates. The major ways to do this is by utilizing one of or a combination of these estate planning tools:
- Will (statutory, witnessed or holographic)
- Trust (Revocable or Irrevocable)
- Financial Power of Attorney
- Advance Health Care Directive
Estate planning is one of the most important type of planning individuals can engage in for themselves and/or their families. Yet, it is one of the most overlooked and de-prioritized planning.