Estate planning involves the creation of legal documents that provide for the disposition of your estate when you pass away or become incapacitated. Your estate includes all of your possessions—your real estate, automobiles, bank accounts, investments, life insurance and personal belongings. Having an estate plan gives you control over how your affairs are arranged. You must make these decisions while you are alive and have all of your mental faculties. If you wait, you risk placing these decisions in the hands of the state and probate court.

 

1. Estate planning is more than just a will

It is super easy to make a will these days. Several online providers offer do-it-yourself wills and trusts for little money. Most people think they are all set once they have executed a will. However, there are other considerations, including:

Durable powers of attorney appointing individuals to make financial and/or medical decisions if you are unable to make these decisions yourself. Health care proxies, also known as living wills, these state the kinds of medical treatment you want and don’t want if you become incapacitated. Trusts which pass property to your selected beneficiaries that provide tax benefits for both you and your loved ones

 

2. Proper estate planning saves time and money

When a person dies without a will it is known as dying “intestate.” In this situation, state law dictates what happens to your estate. If you have made no plan, a case must be filed with the probate court in order to appoint a person to be the administrator of your estate. All of your debts, which now belong to your estate, must be paid first before property passes to your heirs. Probate is a lengthy process and can be very expensive.

 

3. Avoids hefty taxes

Maybe you have heard of the “death tax.” This is just a term used to describe taxes your estate will owe to the federal and/or state government. While right now, in 2022, the federal estate tax exemption is a little over $12,000,000, that is slated to drop significantly in 2026. In addition, many states have much lower exemptions. For example, Massachusetts is set at $1,000,000. This means if your estate is worth even a dollar more, estate tax will be owed.

 

4. Protects children and special needs dependents

If you have minor children, you must ask yourself who will have custody of them if I die before they reach majority? What if there is no other custodial parent? Without an estate plan you are leaving this in the hands of the state. Planning ahead gives you control over who will raise your children if you die while they are still under 18. You may appoint a grandparent, aunt or uncle, or a close friend. If you care for an adult with special needs, you are able to secure housing and funds for that person’s future care.

 

5. Takes care of your future needs

An estate plan not only arranges your affairs at the time of your death, it can also provide for you if you become incapacitated. A durable power of attorney will ensure a trusted individual will look after your financial and medical affairs. A living will ensures you will not be given medical treatment you would otherwise refuse. A well-written trust can provide for you financially before and after incapacitation, and distribute your assets to your chosen beneficiaries—all in one document.

 

Now Its Your Turn

Estate planning is not just for elderly and/or wealthy people. Make an appointment today with an experienced estate planning attorney by clicking below, and take control of your future.