Benefits of Estate Planning

Creating a basic estate plan doesn’t have to be difficult or expensive, and it is something everyone can benefit from regardless of level of wealth or assets. By being proactive and getting your estate plan outlined now, you can ensure your wishes will be honored in the future.

Learn about common estate planning misconceptions, what’s included in an estate plan and the benefits that come with them.

Estate Planning Is Important for Everyone

It Goes Beyond How to Distribute Your Assets

A common misconception is only high-net-worth individuals need an estate plan; however, estate planning is comprehensive in nature and should address more than just who should inherit your assets. A comprehensive estate plan also addresses items such as naming a guardian for any minor children, identifying key people to administer your estate or make healthcare or financial decisions during your lifetime, and outlining circumstances in which assets should remain held in trust for the benefit of loved ones or charity.

A Comprehensive Estate Plan Includes Planning for All Assets

Another common misconception is a will controls and directs who inherits all assets. A will does control and dictate who inherits assets that are solely in your name, but there are certain assets you may own that are not subject to probate (the formal legal process that gives recognition to a will and appoints an executor) and are not subject to your will. A few examples of those assets not subject to your will include jointly owned property, assets that pass by beneficiary designation, and assets that pass via a payable on death (POD) or transfer on death (TOD) designation. Based on this distinction, it is important to provide your estate planning attorney with a comprehensive list of your assets and receive direction on asset titling and beneficiary designations to ensure your goals and wishes are met.

An Estate Plan Puts You in Control

By creating and continuously updating your estate plan, you put yourself in the driver’s seat as it relates to your wealth and legacy wishes. A common misconception is everything goes to the state/government if you don’t create a will. If an individual doesn’t have a will, each state has a set of laws outlining how and to whom property passes at death. Those laws generally require a probate court to determine who the heirs are and their respective shares. Children are given priority, but surviving spouses can typically elect to receive a share.

What’s Included in an Estate Plan:

• A Last Will & Testament directs how to distribute probate assets after death.
• A Financial Power of Attorney allows a trusted individual to make decisions on your behalf on matters related to legal and financials.
• A Healthcare Power of Attorney and Living Will allows a trusted individual to make medical decisions on your behalf if you are not able to communicate these decisions on your own.
• A Revocable Trust is a tool used most often to avoid probate. A revocable trust is a written agreement that determines how assets owned by your Trust will be managed after you pass. One of the key benefits of a revocable trust is the ability to specify not only who gets the assets, but also the timing of the distributions and considerations to be taken into account when making those distributions. A revocable trust paired with a Last Will & Testament is used for more sophisticated estate planning, often for larger estates or more complex bequests to heirs.

Whether you are hoping to gain more control or prepare for your family’s future, creating your estate plan now can ensure you feel confident for the future.