In 1789, statesman Benjamin Franklin wrote to a friend and penned the famous words, “Nothing is certain except death and taxes.” Some 200 years later, those words are just as true as when Mr. Franklin cited them. Of those two things, unfortunately one is the finality of life. In thinking about our own mortality, we often wonder, not about ourselves, but those we leave behind.
You are probably considering estate planning and, like many people, you might have a number of questions. One is likely "Should I even do this?" The simple answer to that question is a resounding, YES. Let's expore the reasons why you should arrange to speak to an attorney about an estate plan and why you should do so as soon as possible.
What an Estate Plan can give you now?
Peace of Mind
No one likes to talk about it, but our mortality sometimes keeps us up at night. According to the Center for Disease Control and Prevention (CDC), more than 2.8 million people died in the United States from a variety of causes in 2018. That number is very sobering when we consider that some of these deaths were sudden and without warning.
Creating a comprehensive estate plan will be one of the best ways to ensure that your family will be taken care of and your legacy will be able to carry on. It's not as scary as it seems if you work with an attorney who can explain it all to you in plain English.
Think of it this way; a captain of a ship is responsible for everyone on board, from the crew to the passengers. While the captain has that responsibility, he doesn’t stand and steer the ship constantly, he allows others to take his direction and keep to the course until the ship is safely at its destination. Like that captain, your estate plan will allow you to have others follow your directions to make sure those in your life are safe.
Who Gets My Stuff?
Imagine this. After months, you decided to clean out your garage. You set a day, and after hours of working on it, you are done. Then you look around and see all this “stuff." Maybe you are asking yourself how you ever accumulated all the "stuff." But in looking around further, you recognize what is important, less important, and quite frankly, what is just junk you should have gotten rid of a long time ago.
After your pass away, your family will need to sort out all the "stuff" you left behind. This includes real estate, bank accounts, investments, life insurance, retirement accounts, and other assets. This is already a difficult time for them. However, by creating your estate plan, you will be helping your family as you've already sorted everything for them. They have to follow your instructions, and if your plan is set up correctly, they will be able to settle your estate without too much trouble.
By creating a Trust and transferring your assets to the Trust during your life takes the guess work out of what do to with your assets. You will also designate who will be handling the management of your affairs instead of just leaving it to chance. Think of your estate plan like a flight plan that you hand your family. All they have to do is follow that flight plan and hopefully they will have a smooth landing.
Perhaps you've heard of probate court. That is a special branch of the court that often gets involved when distributing family assets. The probate process is expensive and lengthy. Do you really want your family held hostage for 1 to 2 years after you are gone? In our next article we will examine how to avoid the time and costs of probate as well as some other items that you may not have even thought of in planning out what to do next.