Do I Really Need an Estate Plan?
Summary: Estate planning is an essential piece of financial planning. However, when most individuals plan their finances, whether for the next five years or 50, they often forget about estate planning. In fact, approximately half of Americans don’t have a will or estate plan. On the other hand, many individuals avoid estate planning because it forces them to ask difficult questions and make difficult decisions, such as “What is my estate worth?” “What happens to my assets after I die?” “Who will care for my loved ones?” In this article, we will review the different elements that go into estate planning, reasons why you might need an estate plan, and how an estate planning attorney can help.
What is an Estate Plan?
Regardless of popular belief, an estate plan is different than a will. It is much more detailed and it dictates the distribution of assets and the estate owner’s wishes. Depending on how the estate plan is organized, it can also help the estate owner and heirs pay less in taxes and legal fees.
However, you don’t necessarily have to have a high-net-worth estate to worry about an estate plan. If you want your assets and your loved ones to be cared for if you pass away or become incapacitated, then you need an estate plan. If something happens to you without one, then your family and loved ones can face huge tax burdens, Court proceedings, and legal costs due to a lengthy probate process.
The Different Elements of an Estate Plan
So, what exactly goes into an estate plan? Here are the most common elements:
Living Will – Details a person’s wishes when he or she is no longer able to communicate those wishes to their physicians and family members. This can shield your family from making difficult decisions during a crisis.
Power of Attorney – Assigns a person the right to make decisions on your behalf regarding assets in the event you become incapacitated. An estate planning attorney in Stuart, Florida can prepare a durable power of attorney to create clear instructions for managing your finances.
A Last Will and Testament – Addresses an individual’s wishes and intentions regarding various matters, including child guardianship, the dispensation of assets, and assigning a personal representative to administer the estate.
Designation of Health Care Surrogate – Allows an individual to designate a person to make medical decisions on their behalf in the event of a serious injury or illness.
Pet Trust – Allows a person to name a caregiver or a charity dedicated to taking care of displaced pets and providing funds designed to last for the lifetime of the pet. This assures pets are well cared for through the duration of their lives.
Probate – The Probate process ensures the orderly transfer of the assets of an estate to the appropriate heirs or beneficiaries.
Special Needs Trust – This provides for the needs of a handicapped family member while preserving qualification for government benefits. This particular type of trust can be written and worded in such a way that ensures spending on behalf of a loved one with special needs is not counted against his or her assets.
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