The Benefits of Estate Planning
Many people – especially those who are relatively young and healthy – put off or avoid estate planning because:
- They don’t like thinking about their own mortality.
- They think it can wait until they’re elderly.
- They think it only makes sense for wealthy people.
However, there are many benefits to estate planning, even for those who are young, healthy, and not so wealthy.
Even a young and healthy person can be hit by the proverbial bus. Having an estate plan gives you the peace of mind that your family will be taken care of and your wishes will be respected.
Estate Planning for Everyone
A well-crafted estate plan:
- Ensures your assets are distributed according to your wishes. You may not want everything you have distributed according the default “intestacy” laws.
- Saves time and money by reducing the complexity of transferring your assets. Choosing personal representatives, agents, guardians, and/or trustees in advance makes the administration of your estate much simpler. An estate plan can also allow you to avoid probate, which has the additional benefit of protecting your privacy.
- Prevent or minimize arguments, lawsuits, and hard feelings among your heirs that can split apart a family.
Incapacity and Living Wills
An estate plan can also benefit you while you’re still alive. Most of us will experience some period of incapacity during our lives. Estate planning can give your loved ones the tools they need to assist you through this difficult transition. One such tool is a “living will” (more correctly called an “advance directive”). An advance directive can specify how you want to be treated in an end-of-life scenario. Under what circumstances would you prefer not to be resuscitated or given artificial nutrition, hydration, or breathing assistance? Providing this information to your caregivers ahead of time can be a great comfort for you and them.
When Estate Planning is Especially Beneficial
Estate Planning is especially beneficial in many common situations:
- High net worth individuals. Estate planning can substantially reduce death taxes and maximize the value of your legacy. An estate planner can help you determine whether it makes sense to use vehicles such as foundations or revocable trusts to reduce overall tax liability. Click here for more information on advanced planning techniques.
- Blended families. Unfortunately, it’s very common in blended families to have hard feelings and arguments at the death of a parent. An estate plan is especially important in such situations to help avoid emotional pain and litigation.
- Family members with special needs. Whether your elderly parents need long term care, or another family has special needs, there are a variety of trusts and planning tools that can help take care of them.
- Support for particular charities. Estate planning can provide lasting financial support to charities you wish to benefit.
- Family businesses. Estate planning is especially important when there is a successful family-owned business. If you want the business to continue, it’s important to take into account the fact that not all of your heirs will be equally willing or able to work in the business. Proper business succession planning is essential to continued success.
If you already have an estate plan, it’s important to review it periodically. Your family circumstances have changed since you created the plan, and federal or state tax laws may also have changed.
Give us a call at 480-838-3000 or email us to schedule an appointment to set up or review your estate plan.