Do you think estate planning is only for the rich? If so, you’re not alone. Many people have a misconception that estate planning is for people who own five houses, have millions of dollars in the bank, make two-million dollars per year, and fly to exotic locations worldwide on a whim.
But this is simply not the case. If you live in California and you’re over the age of 18, you owe it to yourself and the ones you love to consider and implement an estate plan.
What Is Estate Planning?
Before we delve into the five reasons why you need an estate plan, let’s first define estate planning. An estate plan is a written plan that identifies who will be in charge of your life and affairs when you cannot manage them yourself. If you’re thinking, “That’s never going to happen to me,” think again. Chances are, you’ve known people who’ve developed a chronic, debilitating illness that rendered them unable to make crucial decisions about their healthcare and assets. Sure, most of us share a goal of living the life of our dreams, growing old naturally, and then passing away in our sleep, surrounded by family and friends. It’s a lovely vision, but unfortunately, it’s not the reality for most of the population.
Instead, as we age, we tend to require more and more assistance with life’s essential functions – from personal hygiene and dressing to driving and shopping. Yes, we can always identify the rare case of an older adult that can still live alone, drive, climb a flight of stairs, cook, and even hear with no problems. More commonly, however, as we age into senior citizens, we lose some of these abilities. Whether we become hearing-impaired, lose our ability to see well, struggle to make it up and down the stairs, deal with fading memory, or generally slow down physically, it’s in our best interest to implement an estate plan. Here are 5 reasons why you need an estate plan
- With An Estate Plan, You Can Avoid Being A Burden on Your Loved Ones
An estate plan defines expectations and clarifies roles, eliminating any confusion your children might have about their responsibilities in the aftermath of your passing. They will know and understand precisely how to proceed according to your wishes. On the other hand, if you fail to implement an estate plan, your family could be forced to spend everything they have to care for you, especially if you’re an aging parent. If there’s unresolved conflict, you could run the risk of kids or scam artists stealing your money.
When you create and implement a proper estate plan with the help of an attorney, your children can get on your bank accounts and house deed, pay the bills, and access your medical records when you lose the ability to handle these matters on your own. An experienced estate planning law firm will not only put the plan together, but they will also connect all assets to the estate plan and ensure that everyone involved understands their roles. For example, they will educate the people appointed to be the power-of-attorney or healthcare attorney to prepare them to fulfill these responsibilities. It creates peace of mind, knowing that you may not know what tomorrow brings, but at least you are ready for it.
- Without an Estate Plan, When You Get Sick, the Government Gets Involved
A system does exist to take care of you when you cannot take care of yourself. Yes, you read that correctly. You don’t need an estate plan, a power-of-attorney, a healthcare directive, a will, or a trust. The catch? When you get sick and cannot make healthcare decisions independently, the government makes these decisions for you. Consider that for a moment: is there even one aspect of your life you would entrust to the government? We’re not talking about enlisting in the military and serving in an overseas war. We’re referring to what you eat for breakfast, where you live, the clothes you wear, the medicine you take, the doctors you consult, the family members who can visit you, the gifts you can give to your church, the charities you support, and even the bed you choose. Can you honestly say you trust a government official to make one or any of these decisions in your best interest? By creating an estate plan, you entrust your medical and healthcare decisions to those you love (and love you) — versus handing them over to the government or the court systems.
- Setting up an Estate Plan Preserves Family Unity After You Die
When people get sick or die, it places an intense emotional strain on family relationships. Throw in money and jealousy, and the situation becomes even more fractured and difficult. Setting up an estate plan with clearly written, easily understood directives can help preserve the family bonds long after you pass away. You can experience peace-of-mind knowing that your children can get along and gather together for Thanksgiving and Christmas every year for years to come. In the absence of an estate plan, you risk leaving them to fight over money, real estate, whoever got to be the power-of-attorney, or who got a better Christmas present when they were five. Ultimately, these relationships will wither and die. You can prevent this from happening and preserve your children’s relationships with a well-planned, written, and implemented estate plan before you leave this earth. Perhaps the most meaningful benefit of a proper estate plan is the sustainment of family unity.
- An Estate Plan Ensures the Right People Get The Right Assets at the Right Time
Even in the closest of families, some relationships are fraught with conflict. A well-devised estate plan guarantees that the right people will get the right assets at the right time – as long as it’s updated to reflect your most current desires. For example, if your daughter marries a guy you consider a “loser” and you don’t want to leave her anything, lest he inherits some of your assets through marriage, you should amend your estate plan. If you have specific requirements, for example, “I want my son to receive $100 a month,” or “I want my daughter to live in my house on the condition that she never sells it,” your attorney can help you clearly state these conditions in your estate plan. The bottom line? An estate plan formulated by an experienced attorney and updated as necessary will ensure the fulfillment of your directives.
- An Estate Plan Helps You Avoid Probate
Probate is the process of hiring a lawyer and going to court, which assumes responsibility for:
- Paying all your taxes
- Paying all your debts
- Distributing whatever is left to your heirs
The entire process takes about a year to complete and distribute inheritances to your children. However, if your beneficiaries fight over these assets, it adds time and expenses to the process – not to mention unnecessary stress. Keep in mind that the California Probate Code mandates probate fees, not your attorney. If all of this sounds like a massive headache you’d prefer to avoid, you should meet with an estate planning attorney to prepare your estate plan, which you will need to fund and sign.
Is the thought of the government taking your stuff or controlling your estate after you die giving you nightmares or insomnia? Do you worry about becoming a burden to your family?
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