On the most basic level, estate planning allows you to take control of your affairs. Without a plan of your own, you turn that control over to the government. It, not you, will make critical decisions that impact you, your family, and your legacy.
Let’s look at a few examples.
If a person passes away without a will or trust, his or her estate assets are distributed according to what is known as intestate succession. As a result, “who gets what” follows strict guidelines, set by the state, with no regard to the actual emotional relationships between you, your spouse, your children, and members of your extended family. What you would have wanted is irrelevant to the state. Your assets must be distributed, and the state has devised a formula to do so.
Another reason you need an estate plan of your own is to ensure that a person of your choosing has the authority to make medical and financial decisions on your behalf if you become incapacitated.
Without your own plan, the state will decide who can make decisions for you based on established guidelines. Or, someone might petition the court to gain control over your assets and medical care, and a judge will decide whether to grant that person’s petition. Either way, you will have no say in the matter without your own plan. The result? You may not receive the level or type of medical care you would have wanted. Conversely, you might be subjected to medical procedures you would not have wanted to keep you alive in an end-of-life situation. Similarly, financial decisions might be made about the management of your assets that you would never have taken on your own.
If you have minor children, you must also consider what will happen to them if something terrible happens to you and your spouse. An estate plan allows you to name people of your choosing—people you trust—to raise and care for your children if you cannot.
Without a plan, the court will decide who has control over your children. The court’s decision could lead to your children being raised in a place and manner you never would have wanted.
These are just some of the reasons to have your own estate plan. Depending on your particular needs and goals, your customized plan can:
- Protect your assets against divorce, lawsuits, creditors, and other threats
- Pass your work ethic, sense of responsibility, and values on to heirs
- Reduce income, gift, estate, and other taxes
- Avoid probate, thereby minimizing delays in the settlement of your estate and keeping your family’s financial information private
- Protect your loved ones’ inheritances against a wide range of threats, including their own poor decisions if they are not yet mature enough to manage an inheritance on their own
- Leave a lasting legacy
Seize control of your affairs and legacy with a customized, comprehensive estate plan of your own.