Why You Need an Estate PlanBy: Jackie Waters
Posted on:01/19/2017 Updated:01/20/2017
It’s not the most comfortable topic to discuss, but for the sake of practicality, making a plan for when you die is an incredibly important step everyone should undertake. Having an estate plan will determine what happens to your property, who gets your assets, who takes care of your children, and what happens to you. While an estate plan sounds like something for the wealthy, it’s actually something everyone should have in place. One doesn’t even need to seek out a pricey lawyer to enact this type of plan. For those who don’t have high-value estates, it’s even easy to find legitimate online options for quickly putting together legal documents that will help carry out your wishes. Regardless of your bank account, having a plan in place will give you peace of mind and it will ease the burden for your relatives upon your passing.
Many people assume that having a will means the courts don’t get involved. Unless there is a trust, which is usually part of a high-value estate, a will usually goes through probate, and adheres to a state’s probate laws. That being said, it’s still important to have a will, and these can easily be drawn up. A will sets the stage for what you want to happen upon your death. At the very least it gives you the power to list your preferences for having your wishes carried out. With a will you can assign an executor who will monitor the process of having your assets divided and your debts paid out. If you don’t have an executor, the courts step in to manage your estate.
Creating a will isn’t an expensive process, especially if it’s fairly straightforward. In addition to a will, it’s a good idea to create a living will, in the event that you suffer a trauma that leaves you incapacitated. A living will gives your family and the medical staff an idea of how they should proceed with your care.
If you have minor children or care for a disabled relative, it’s important to determine their guardianship in the event of your death. This allows you the opportunity to decide who will raise your children if you die unexpectedly, rather than your children entering the foster system. It also gives you the chance to determine who will care for your disabled child or relative, rather than the courts deciding that they should enter a facility.
Property and Assets
When it comes to your property, there are many options for how to handle what happens to your belongings. (Again this is when a will is an excellent document to have.)
If you have someone in mind to take ownership of your home, there are life estate deeds or lady bird deeds you can have in place to avoid probate. If you still have mortgage payments, there are methods you can employ to help your beneficiary make payments.
You might also put plans in place for how your property will be managed once it has passed over to your beneficiaries. For example, if conservation is an issue close to your heart, you can set up a conservation easement, which allows you to ensure your property will be protected from environmentally harmful developments while allowing you (or your beneficiaries) to continue to use the land. If you don’t have heirs, you might consider making a land donation. This is another great way to ensure your land is protected after you’re gone.
By naming beneficiaries on your bank accounts, IRAs, or life insurance policies, your money can pass directly to your relatives without going through probate, though there are circumstances that can make probate unavoidable.
Putting the Plan Together
Once you have a plan in place, it’s likely you will have a lot of paperwork. Make sure you keep these papers in a safe place, and give copies to those who will function as beneficiary or executor.
In addition to these papers, make a point to have all in one place your health insurance information, financial documents, social security card, bank account information, and any other documents that might be needed upon your death.