Does everyone need estate planning?
Estate planning is often misunderstood as something only the wealthiest of families should have. But, everyone can benefit from an estate plan. Why? Well, everyone has an estate. Your estate includes all the things you own whether you know you own it or not. Your home, your car, your bank accounts. It also includes things like the photos on your Facebook page and your digital music collection.
In this article, we will discuss just a fraction of the ways everyone can benefit from an estate plan.
Note: If you want to brush up on the basics of Georgia estate planning (Wills, Probate, Power of Attorney, Revocable Trusts, Irrevocable Trusts and Advanced Healthcare Directives) take a look at these free ebooks.
Access the free videos and subscribe to the Firm's channel on YouTube by clicking here.
What does estate planning allow you to do?
You probably have some idea where you want your assets to go and when they are to go there, but good estate planning involves much more than leaving a detailed list of instructions related to your passing.
Good estate planning allows you to:
- Pass on your assets and properties to the people you want, rather than having the Court decide that for you
- Appoint guardians for minor children so that you know they are in the right hands
- Prevent confusion and disputes among your family
- Provide for loved ones with special needs without interrupting their government benefits
- Provide for family members who may not be responsible with money and may need protection in the future from divorce or creditors
- Reduce taxes, court fees, and legal expenses for your loved ones after you pass
An estate plan can not only preserve your lifetime's work, but also help ease the burden off of your family and minimize potential conflicts between your loved ones. Attaining peace of mind and reassurance for life's uncertainties is invaluable.
Let's discuss just some of the situations you may find yourself:
1. I'm separated or recently divorced
Divorce is not easy. You have a lot of decisions to make, but you should add estate planning as one of them. Maybe you already have a plan that's been sitting in a cabinet for the last 10 years. Maybe you don't have a plan at all. Either way, you should address your estate plan as soon as possible. Updating your Advance Directive for Health Care, your Power of Attorney, and your Will is paramount.
Would you want your spouse or ex-spouse to make health decisions for you if you're recently divorced? Are they the person you want handling your finances if you become disabled? Someone who is separated or recently divorced definitely needs an estate plan.
2. I have stepchildren
We have the privilege of working with many blended families and I've learned over the years that many people have foregone estate planning when it comes to stepchildren because they assume their spouse's children will inherit just like their own. But, in Georgia, stepchildren do not naturally inherit a person's estate without an estate plan. If you want your stepchildren to receive an inheritance from you, you need to put an estate plan into place.
3. I have a family member that requires specialized medical care
If you have a child or an adult child who has special needs and is receiving government benefits like SSI or Medicaid, you need an estate plan to ensure they continue to receive those benefits if you pass away. Unfortunately, without a plan, your child may receive an inheritance that is considered an available asset as defined by public benefit agencies. The consequences could be the child is prevented from receiving those benefits because of the lack of an estate plan. The best way to prevent that from happening is to develop an estate plan which might include a Special Needs Trust.
4. I want to gift different amounts to my children
There are times where my clients want their children to inherit different amounts. Usually, it is because a child is independently wealthy or a child is a spendthrift and the parent is concerned with dropping a huge inheritance into their laps. Either way, without an estate plan, the State will treat the children equally and they will all inherit the same amounts. If you have a reason for gifting different amounts to your children, without an estate plan, you will not be able to prevent that from happening.
5. I own a home.
The number one mistake I see homeowners make when it comes to estate planning is assuming that the surviving spouse will receive the home if they were to pass away. Unfortunately, it doesn't always work that way. It will depend on how the property is titled and, no, it doesn't matter if both names are on the title. It matters how the property is jointly held. One way and the property will pass to your estate and, if you don't have an estate plan, it could mean your spouse will have to divide the home with the children. Don't assume the surviving spouse will get the home if you pass away. Put an estate plan into place and ensure the home goes where you want it to go.
6. I own property in another state
These days, it is very common for people to own property in another state. Whether they received the property through inheritance or whether they purchased the property as a vacation home. The issue is your family will need to go through the probate process twice if you don't have a proper estate plan in place. They will have to go through the probate process in the state where you live when you pass away and again in the state where the other property is located. There are ways to avoid going through the probate process twice and it involves getting an estate plan into place.
7. I don't want my family to go to Court after I pass away
I've never met a family who said they couldn't wait for their children to go to Court after they pass away. In fact, most people would indicate they would prefer their children avoid the Court if at all possible. Without an estate plan, your children will have to visit the Probate Judge to get their inheritance and this can be a lengthy process. There are several ways to avoid the probate process and among them, most importantly, is putting an estate plan into place.
As you can see, there are many types of people who could benefit from having an estate plan in place. In fact, you could say everyone could benefit from having an estate plan.
Mr. Farrell is the author of Estate Planning for the Modern Family: A Georgian's Guide to Wills, Trusts, and Powers of Attorney. You can learn about his book here and learn more about John here. Join the more than 1,300 people who subscribe to his Newsletter here. Feel free to send John a message here.
