It is not uncommon for people to think that they do not need to develop an estate plan until they are older or acquire significant assets. Estate planning is essential for people of all ages and financial status, though, and people who neglect to develop a thorough estate plan may negatively impact their finances and rights. If you have questions regarding the benefits of engaging in estate planning, you should contact a lawyer to assess your options.
Why Estate Planning Is So Important
Broadly speaking, estate plans are tools that allow people to dictate how their affairs should be handled in the event of their death or incapacity. One of the most commonly used estate planning tools is a revocable living trust, which is a document that states how a person’s assets should be managed in the event of disability and then divided once they pass away. Revocable living trusts are invaluable, as they generally allow people to distribute their assets in any manner they choose, as long as it does not violate the law. Conversely, if a person dies without a revocable living trust (or will), the state will divide their property in accordance with the state’s intestacy laws. Wills also allow people with minor children to name a person to act as their children’s guardians in the event of their death so that they are properly cared for and avoid becoming wards of the state.
Estate planning also lets people plan for how their affairs will be handled if they can no longer care for themselves. Specifically, you can create a health care proxy, which permits the person named in the health care proxy to make decisions regarding what care you will receive if you are no longer able to make such decisions for yourself. If it is not clear who has the right to determine a person’s treatment or care, it can lead to contentious battles between family members and, in some cases, litigation. Similarly, the disability provisions of a revocable living trust allow a disability trustee to handle your finances and make transactions on your behalf if you become mentally incapacitated. Without disability planning, you run the risk of being taken advantage of economically.
If a person dies without an estate plan, their spouse, children, and other heirs will likely inherit their estate, but they may have to pay substantially more taxes and fees. Fortunately, though, some estate planning tools, like revocable living trusts, irrevocable trusts, and beneficiary designation planning, allow people with significant assets to transfer property to their heirs without passing on substantial tax consequences as well.
Meet with a Trusted Estate Planning Attorney
Estate planning tools allow people to make key decisions regarding their future and direct how their affairs will be handled, and it is smart for everyone to develop a plan that meets their needs.
If you have been reluctant to develop an estate plan and want to explore all your options, please contact Roth Elder Law today!