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Three More Reasons to Have an Estate Plan

October 13, 2023 • | Curran Estate & Elder Law, PLLC
Estate planning not only makes things easier for your loved ones if you become incapacitated or when you’re gone, but it also does these three important things.

Even after COVID, most Americans still don’t have an estate plan. A 2023 survey reported in Kiplinger’s recent article, “Three Overlooked Benefits of Estate Planning,” found that 75 percent of respondents didn’t have an estate plan. Worse, 72 percent of all respondents over age 75 didn’t have an estate plan.

It’s an easy task to postpone. No one likes to think about death -- their own or their spouse’s. However, not having an estate plan may force your loved ones to deal with an expensive, time-consuming, stressful mess that can be easily avoided.

Estate planning involves the creation and execution of the documents needed to address healthcare, financial, and legal affairs in case of incapacity or death. This is done with a series of documents created by an estate planning attorney. The names of the documents vary by state, but their function is roughly the same:

  • Will—A legal document used to express your wishes to distribute your property, name a Guardian and an Executor.  there are minor children, the Will names who will receive custody of your children if you and your spouse both die.
  • Trust—A fiduciary agreement used to hold out-of-state property, protect assets for your family in the event nursing care is needed, or to save inheritance tax.
  • Durable Financial Power of Attorney—A legal document naming a spouse, partner, or other third party to manage finances if you can’t manage your own decisions.
  • Durable Health Care Power of Attorney—A document naming a third party to make positive medical decisions if you are unable to do so yourself, as well as giving another person the right to view your medical and insurance records and communicate with your healthcare providers.
  • Advanced Care Directive/Living Will --A document outlining the medical care you want or do not want if you are in an end-stage condition or permanently unconscious and can no longer communicate these decisions yourself.

Why should you go through the trouble of having all these documents created? If focusing on the benefits of having an estate plan is the motivation you need to get going, here are several good reasons to have an estate plan.

Securing management of health care and finances if you’re incapacitated. No one likes to think they’ll ever be too sick to care for themselves or make their own decisions. However, this happens routinely to older Americans. Diseases like Alzheimer’s and other illnesses strike older adults with increasing frequency as they age. If you have an estate plan in place, family members can step in to take care of you if necessary. They will be able to pay bills to keep your household running smoothly, speak with your doctors, potentially preserve assets if nursing care is required, and avoid going to court to obtain guardianship or conservatorship to handle all of these things.

Fulfilling your wishes. Lacking a Will, the laws of your state will determine how your property is distributed, with most states following a next-of-kin lineage. If you want your spouse to inherit everything, and the state law divides your estate so 50% goes to a spouse and 50% is divided among the children, the state law will rule; and this is most likely not how you want your assets distributed at your death.

Another set of problems comes from outdated Wills. If you named someone to be your Executor 30 years ago and haven’t updated your Will, they may no longer be in your life, or you may not want them administering your estate. Another problem is that, if you’ve divorced a spouse and never updated your Will, life insurance beneficiaries, or beneficiaries on your retirement accounts, your next call should be to your estate planning attorney and insurance agent.

Avoiding probate. Probate is a process where your Will is filed with the Court, reviewed by a Judge, and approved—or not—to be administered. Depending on the jurisdiction, all documents, including your Will, are available to anyone by searching the public records. An estate planning attorney can help you decide what assets you are willing to have to go through probate and what might be removed from your estate using trusts. Trusts provide more control over asset distribution and, depending upon the trust used, can provide protection from creditors and nuisance lawsuits. Trusts are also used in tax planning, which should go hand-in-hand with estate planning.

Estate plans have many benefits. Consider having an estate plan as part of your legacy to protect yourself during your lifetime and help your loved ones at death.

Reference: Kiplinger (September 6, 2023) “Three Overlooked Benefits of Estate Planning”

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