I'm often asked about the importance of an estate plan. People wonder why they even need to bother with it. The truth is, you don't have to create an estate plan. The law certainly doesn't require it. However, a good estate plan addresses two very fundamental issues.
The first issue is "Who will get my assets when I pass away?" That's the issue that most people think about when they think about estate planning. They think it's all about dying and passing assets from one generation to another or from one person to another. That is certainly an important element of estate planning - who gets what when you die. Simple enough.
However, there is another very important question that a good estate plan addresses: "Who has the legal authority to act on my behalf if I cannot act on my behalf?"
These are the two most important issues that a good estate plan addresses. The second one is the one people think about least often.
People often mistakenly assume that others can act on their behalf by virtue of their familial relationship or by virtue of marriage. Read this carefully - Just because I'm married to my wife does not give me the legal authority to act on her behalf and vice versa. Similarly, an adult child doesn't have automatic legal authority over their aging parent and vice versa. Just because you are somebody's mother or father doesn't give you the legal authority to make decisions for that person.
When my son turned 18 years of age, I had him sign an Advance Health Care Directive and a Durable Power of Attorney. When he turned 18, he technically became an "adult" and these legal tools will allow my wife and I to make legal decisions on his behalf if he cannot.
So yes, estate planning is indeed about who gets what when you pass away. However, and perhaps more importantly, it's about giving the people that you care about the legal tools they need to help you when you need help - to give them the legal authority to act on your behalf.