Many of us start a new year with new resolutions. Few people, however, make estate planning one of their resolutions. Statistics tell us that fewer than half of Americans have even a simple estate plan and unfortunately, that doesn’t just impact individuals.
Estate planning isn’t just about getting your ducks in a row or avoiding paying too much in taxes; it’s an opportunity to provide for your family emotionally and financially. It’s about what you want to have happen after you pass away. Whether it’s a sudden accident or illness, or the worsening of an existing condition, estate planning done in advance can ensure your family knows your healthcare wishes. That one less emotional burden to bear in the midst of a stressful time.
People most often associate estate planning with passing assets on after their death. However, they may not realize that passing any asset to the next generation has its complexities. If you—like many Americans—don’t have an estate plan in place, there’s still a plan for your assets. Passing away “intestate,” or without any plan, means you’ve decided to let state law determine who gets your assets. That plan is often not how you’d want your possessions to be distributed.
To prevent passing away intestate, many people create a will. Some use online resources, while others seek out an attorney. One of the problems with most online do-it-yourself tools is they rarely generate wills that address state-specific estate planning laws. Each state has its own idiosyncrasies and most online tools don’t account for differences in state laws. But even if you consult an experienced attorney, a will alone might not fit your estate planning goals.
In order for your heirs to begin distributing your assets according to your will, they must go to probate court and prove it to be your last will and testament. Once the court determines it’s really your will, heirs are still not done with probate court. The probate process is a matter of public record and the executor of your estate must document the distribution of your assets to ensure it all passes according to your will, down to paying your last phone bill.
If you prefer something more private, less lengthy and likely lower legal costs, a trust might be a better option for you. A trust allows you to pass any assets owned by the trust according to the terms of the trust document, no probate necessary. The biggest hurdle in using a trust is that phrase, “any assets owned by the trust.”
Did you know that the name on your accounts determines what happens to your assets after your death? Any asset that does not name the trust as either the owner or the beneficiary cannot be distributed according to the terms of the trust. That’s why at Family Estate Planning Law Group, we work closely with our clients to ensure assets are titled correctly and therefore aligned with your estate plan.
As we start the New Year, think about your estate planning goals. How do you want loved ones to care for you in a medical emergency if you’re unable to do so yourself? Do you have specific assets or possessions you want to ensure go to a particular family member or friend? For 2017, start the year by thinking of your family and how you’d like to care for them. Your estate planning goals are unique, so think through these goals just as you would any other New Year goals.