Estate planning is on many people’s to-do lists, but it is often postponed in favor of tasks that seem more rewarding. No one wants to contemplate their own mortality, but estate planning brings peace of mind. It can put worries to rest about what happens to you or your children in the event of unforeseen circumstances.
Is An Estate Plan Just About Money?
One reason people shy away from estate planning is that they believe it is just for the wealthy. An estate plan covers much more than just money. It specifies what happens to you if you are sick and need someone to make medical or financial decisions on your behalf. It also protects people you care about.
If you need some incentives to make estate planning your new year’s resolution, here are four good reasons why making an estate plan will bring peace of mind in the New Year.
1.An Estate Plan Can Protect People You Love
If you have minor children, you should nominate a guardian for your children in your Will. Most people are fortunate enough never to have to rely on these documents, but it could be the most important decision you will ever make. Wills and Trusts can also look after your children financially when you have passed away. Especially for people who have children who are minors, or who have any family members who are sick, making an estate plan is an important way of protecting the people you love. A proper estate plan and the use of trusts can help you avoid probate as well and save your estate thousands of dollars and save your family many headaches.
2. An Estate Plan Can Specify How Your Affairs Are Managed if You Are Sick
An estate plan usually consists of multiple documents that plan for your incapacity following an accident or illness. These documents make it possible for someone to attend to your personal business and affairs while you are incapacitated.
The Durable Power of Attorney, Health Care Proxy and Living Will are three of the most common documents used to manage affairs in the event of an accident or illness.
The Durable Power of Attorney permits someone you trust to conduct your personal business affairs (such as banking, paying your bills, filing taxes, for example) if you are unable to do so. It avoids the hassle and the risk and costs associated with the probate process. If you have not made a Durable Power of Attorney, someone must go to court to appoint a person to look after your affairs. These legal proceedings are time consuming, costly, and most importantly, you have no choice about who oversees your affairs.
Your Health Care Proxy is a document that appoints someone you trust to make medical decisions for you when you cannot make these decisions. It is designed for situations where there is a sudden accident requiring timely medical decisions or in situations where a parties mental or physical health are getting worse.
Your Living Will is the third common document that states a person’s preferences for end-of-life care and treatment. It can help guide your loved ones if there is a question about whether a person should receive extraordinary life sustaining measures or palliative care.
3. An Estate Plan after a Divorce: One occasion when you should have an estate plan created or updated, is after you get a divorce. At our Family Law and Estate Planning Center, we often work with people getting a divorce who have a Last Will and Testament and other estate planning documents with language dictating that their Ex-spouse is entitled to the other spouse’s assets. More important, the Ex-spouse may have your power of attorney or be your medical agent in your health care proxy. Most people want to avoid this situation, and to do that your estate plan must be revised or re-done. In another scenario, if you are divorced and get remarried, your money could automatically go to your new spouse, but you may want it to go to your children from our previous marriage, as well. There are elective share statutes in most states that deal with this issue when there is no estate plan, but it is always better to make your own decisions through your estate plan that comport with state statutes.
Your estate plan can also help exclude assets from the probate process. Trusts are a more complex instrument than a Will. They are designed to convey property to beneficiaries and avoid the probate. They can also help to grow your wealth as part of your overall financial planning strategy.
Estate planning is necessary for everyone who is over eighteen, whether you have significant assets or not. At Amaral & Associates P.C. we offer a sensible approach which addresses your specific needs during your current stage of life and beyond. The Family Law and Estate Planning Center can also provide referrals to our network of experts including financial planners, and tax experts. We strongly recommend that you do not put off your estate planning for another year. This is particularly important regardless of if you are sick, getting a divorce and/or have minor children, or if you are getting older. If you are ready to make estate planning your new year’s resolution, please call us at (617)539-1010, ext. 111 or email us to set-up a consultation at email@example.com .