Why is Estate Planning Important?
Everyone needs estate planning, whether you’re rich, poor, young, elderly, a man, or a women you need estate planning.
The fundamentals of estate planning are easy to understand. It’s an organized way to provide the most support and security for yourself and your family. Estate planning strategies are designed to provide support and security throughout your lifetime and after your death.
What Does an Estate Planner Do and Can I Do it Myself?
“Do it yourself” estate planning is kind of like pulling your own teeth. Sure you could do it, but the chances of creating more problems for yourself are pretty high. Why would you consider doing this yourself? You have worked your whole life – don’t you think you should take it seriously?
Wills, trusts and other estate planning documents are legal and ethical, and have been used for years. Unfortunately, some non-lawyers and even groups are pushing cheap, cookie cutter plans. The old adage of “you get what you pay for” holds true. Your decision to save a few bucks now could cost your loved ones thousands. Preparation of legal documents is not one of the things you should skimp on.
Why is Estate Planning Important To Me?
If you want to protect your spouse and children then you should have an estate plan. You might be wondering what exactly you are protecting them from. Let’s explore some of the unfortunate events that can happen in life.
What would you and your family do if you became disabled? Who handles your money if this happens? Are you comfortable leaving this decision to the courts? If not then you need an estate plan.
What happens to your family after your death? If you have not considered this and taken action to protect the ones you love – who else will? Having an estate plan not only protects your family but also guides them on how to best to allocate your estate.
I understand that it is not fun to think about these things, and no one “wants” to plan for tragedy. However, having an estate plan can be one of the most loving acts you make for your family.
I already have a Will – do I really even need to think about this “stuff”?
A Will is a document for death and the purpose of a Will is:
- To organized property transfers
- To eliminate having the state from deciding your final affairs
- To make special bequest
- To name the person or people that execute your requests
What Makes A Will Valid and Do I Need an Attorney For a Will?
You should always get legal advice from an attorney. However, normally A Will is valid if:
- The person that makes it is competent at the time of its creation
- The person that makes the Will signs it in front of a qualified witness
How do I choose an Executor or Executrix?
You should pick someone that is willing to serve. You should make your choice based on logic and not emotion. The person you select to execute the duties of your Will needs to be able to perform the following duties after your death.
- Know how to access and gather all of your money
- Pay your final bills and estate taxes
- Put the remaining money in a safe spot
- Allocate the remainder of your money as you have stated in the Will
Other qualities to consider when choosing someone to handle your final affairs are:
- Do they know the people you wish to leave your money to?
- Do they know when and where to look for help?
- Are they experience in dealing with this type of “stuff”?
- Do they live in the same state as you?
- Are they honest, fair, and don’t play favorites?
- Do they know how to be discrete and drama free?
What is Probate?
Probate is often misunderstood. People often believe that they don’t need to worry about probate since they have a Will. However, many times this assumption is quite often wrong.
Probate is when the distribution of your estate is mediated and overseen by the court. The court’s goal is to make sure that there is a full accounting of the money. The probate court pays all valid creditors before the estates money is distributed to the beneficiaries listed in the Will.
Having a Will doesn’t guarantee that your estate will not end up in probate after your death. Oddly enough, most times people die with a Will, there will be a probate proceeding. There are court cost and attorney’s fees associated with the probate process.
What is The Approximate Costs of Probate?
According to the experts, the total cost of probate can easily range from between 3% and 10% of the gross estate.
The costs of the probate process typically include court fees, attorney fees, and accountant fees. In addition to payments to creditors, taxes, and to the executor of the estate that is handling the affairs of the deceased.
Can I Bypass The Probate Process?
Yes, but there is not a one-size- fits-all type of solution. Probate can sometimes me adverted with an easy and simple cost-effective solution. Other times it may be difficult. However, proper pre-planning can definitely assist in keeping your estate out of the probate process.
What is a Power of Attorney and Do I Need One?
Let’s face it, bad things sometimes happen to good people and it is always good to be prepared.
Powers of attorney come to your rescue when you are not able to make decisions on your own behalf. These are powers that you give to someone else when you are alive but incapable of acting on your own behalf.
You should have two types of powers of attorney, one to make health decisions and one to make financial decisions. You can designate the same person for each of these or two separate people. The Powers of Attorney allow someone to “become you” when you are not able to act for yourself.
This Estate Planning Stuff Can Get Really Complicated?
If you don’t have experience in this subject then it’s hard to even know what questions to ask. The right financial professional can help simplify things for you. It is necessary that you find a adviser that has the experience and knowledge to deal with all of you concerns and issues.
Make sure that all of your concerns are addressed and explained to your satisfaction. Just like anything else, your best results will be when you pre-plan. Last minute crisis planning is better than nothing. However, it generally does not provide the best results, and often causes loved ones additional stress when they are already suffering. Take action now – you and your family will be glad you did!