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Is an estate plan really for me?
Some people associate the term estate plan with high-net worth and think they don’t need one because they don’t fall into this category. But it’s actually just the name we’ve given to the legal documents that direct how property is distributed after death. The centerpiece of an estate is either a Will or a Trust (most often a Revocable Living Trust). A thorough estate plan will also address how you and your property are to be cared for if you become incapacitated.
If you have property that you’d like to pass on to certain people or maybe even a charitable organization while minimizing the government’s cut, then you need an estate plan. Depending on your family circumstances and the types of property you own, your estate plan may comprise a single, comprehensive legal document or a more advanced series of legal documents.
In either case, the more up-front planning you do for your estate, the more you can control what happens to the property you’ve worked hard to acquire over your lifetime.
What happens to my property if I don’t have an estate plan?
If you don’t have an estate plan in place when you pass away (referred to as dying intestate), the state that you reside in at the time of your death decides how your property is passed along. While each state has its own intestate succession plan, the general rationale behind them is the same, which is to pass along property to the nearest family members. Your property that isn’t passed along through its titling (for example, joint tenancy with right of survivorship or a payable on death clause on a bank account) will go through the state’s intestate succession process (similar to Probate).
For some families, the state’s plan may work fine. But for blended families, second marriages, families with members who have special needs, and other situations, the state’s plan may not take care of your family the same way you would. For that matter, in New York even the Cleavers would need an estate plan if they wanted to ensure that their grandchildren received something. New York intestate succession law provides that grandchildren only receive a share if the parent (in this case, Beaver or Wally), is no longer living.
Another important thing to consider is taxes. While an effective estate plan ensures that the most wealth as possible goes to the beneficiaries you name, the state’s intestate succession plan does not include tax strategy.
Benefits of having an estate plan.
A key benefit of creating an estate plan is that you’re in the driver’s seat—you decide how your property is distributed. Maybe it’s important to you that your grandchildren receive something directly from you when you pass away. Maybe you’ve provided more support during your lifetime to one child, and you want to even up things with your other children through your estate plan. It could be that you want to control how your children can use their shares until they reach a certain age. Or maybe you don’t have children and you want to leave your entire estate to your alma mater or to a charitable cause that’s important to you. Again, you worked hard to acquire your assets over your lifetime. You should decide how to pass them along.
In addition to giving you control over the distribution plan, having an effective estate plan in place brings peace of mind. You’ll know that you and your assets will be cared for the way you want if you become incapacitated. And you’ll know that after your death:
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Your minor children are cared for by the guardians you’ve selected
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You’ve done what you can to prevent disagreements among family members
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You’ve incorporated tax strategy to maximize the wealth available to your beneficiaries
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Your estate will pass on as smoothly and as quickly as possible
Next step:
If you’re ready to begin the estate planning process, Roth Elder Law, PLLC would be happy to start that conversation. Call us today to schedule an initial meeting at 607-962-6162 or complete this intake form and we’ll be in touch.
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