Why Everyone Needs an Estate Plan
1. How is an estate plan different than a will?
A will dictates how your assets will be distributed after your death and names an executor to handle the distribution. An estate plan includes a will, possibly a trust and two other important documents: 1) durable power of attorney and 2) advance medical directive.
2. What is a durable power of attorney?
A durable power of attorney the person who will manage your financial matters on your behalf if you were unable to. This could happen if you have become incapacitated or merely traveling abroad, making you unavailable.
3. What is an advance medical directive?
An advance medical directive defines how your end of life wishes are to be handled. This document handles medical decisions such as comfort measures and life support and more.
4. Money and Time
One motivating factor to have an estate plan in place is that if there is no will or estate plan then the estate goes through probate. This can be a time consuming and costly process. By setting up a trust you can avoid significant state and/or federal estate taxes. Having a clear set plan also helps that the estate will be distributed exactly as you wanted it to be and help reduce the risk of family infighting.
5. Peace of Mind
With an estate plan, you can have the peace of mind knowing that your estate will be distributed exactly how you wanted. You will have taken some of the stress off your family by having a plan that can executed after your passing without having to put your family through court proceedings.
6. I don’t have a lot so I don’t need an estate plan
Everyone should have an estate plan, you do not have to own a lot of real estate or have a lot of money in the bank to need an estate plan. Do you have children under 18? Do you have a retirement account? Do you have life insurance? Do you own your own home? If you answered yes to any of these questions then you need an estate plan!