Many clients believe they do not have much of an estate. This may lead them to believe they don't need to worry about an estate plan.
Everyone has an estate whether modest or extensive; we all own something. Mistakenly, clients often believe the size of an estate determines if estate planning is necessary. In reality, the overall value of an estate has much less of an impact on the benefits of estate planning than many realize.
Value comes from the “plan” not the “estate.”
If you give one hundred people a $100 bill, everyone has $100. Now ask what they will do with the $100 and you will have one hundred different answers. This is why the “plan” holds the value.
Estate planning helps to express your wishes for your $100 bill up to and after you die. A comprehensive estate plan should also include planning for incapacity and allowing your wishes to be honored when you are no longer able to express them yourself.
In addition to planning for what happens to your valuables, a good estate plan should provide for much more, including:
- Plan for medical decisions and management of your financial affairs in the event of incapacity.
- Provide for your care and quality of life in the event of disability.
- Provide care instructions for minor children.
- Provide for family members who have special needs without endangering their government benefits.
- Advise on probate avoidance techniques for your assets.
- Protect assets from family members who may be unable to manage their finances or need creditor protection.
- Reduce fees, expenses, and taxes.
- Provide for care of pets.
- Consider insurance options for death, illness, disability, or long term care.
- Provide for funeral and burial expenses.
- Provide for end of life decisions.
- Express post death wishes.
- Protect against court control and decision making through “Intestacy” or “Guardianship.”
Each of the benefits described above plays a vital role in your plan and should be addressed through discussions with your family and loved ones. The benefits and consequences of estate planning should be discussed with an estate planning attorney. Your attorney will advise you on the best plan to achieve your desired outcome, identify pitfalls or errors, and provide appropriate guidance on how to put the plan you want into action.