What is an estate plan? Do I even need one? These are two of the most common question I receive as an estate planning attorney. This article is designed to help you better understand what an estate plan is and why you may need one.
What is an Estate Plan?
The term estate planning once conjured up visions of the super wealthy signing a will in a mahogany-laden office with a quill pen. This is no longer the case. Today, estate planning is a much broader concept and applies to everyone. It can be defined as a list of instructions to guide your loved ones as to how to manage your affairs if you are gone, or simply unable to manage them yourself. A properly drafted estate plan addresses a number of issues. First, your estate plan should include the nomination of a loved one to assist you with your financial and medical decisions when you are older. Second, an estate plan should provide for the care and well-being of your minor children in case you are unable to do so yourself. Lastly, your estate plan should provide for an efficient and orderly transfer of your assets to your named heirs.
Do I need an Estate Plan?
Determining whether or not you need an estate plan is often the first step in the estate planning process. Atlas Law, PLC developed this checklist to help. Take a look at the list below which includes many of the most popular reasons to get an estate plan. If you answer yes to any of these questions, then it may be time to contact an estate planning attorney.
Estate Planning Checklist:
Do I Need An Estate Plan?
______ Do you have minor children?
If so, you need an estate plan. An estate plan allows you to appoint a guardian to care for your children’s welfare if you are unable to do so yourself. You can also create a trust to provide for them financially while they are minors.
______ Do you not have children?
If not, you need an estate plan. For most people, their children are their heirs. If you do not have children and have not done any estate planning, then your estate may go to some accidental heirs. Drafting an estate plan will prevent your estate from going to unintended or undesirable persons. Additionally, children are often who most people rely on to help with our medical and financial decisions as we age. Not having children creates a vacuum, of sorts, whereby there is no one available or even permitted to help you with important decisions. An estate plan allows you to appoint a financial power of attorney and medical power of attorney to help you with such decisions.
______ Do you want to control your medical decisions if you become incapacitated?
If so, you should create an estate plan. As we age, some of us may become incapacitated and unable to make decisions regarding our own medical care. Preparing a living will and patient advocate will allow you to communicate your wishes regarding healthcare to your loved ones. Ensuring your wishes are known and followed.
______ Do you Own a home?
If yes, you need an estate plan. Our home is often our biggest investment. Without proper planning, your home could end up in the court system should tragedy ever strike. An estate plan can prevent your biggest asset from being tied up in court. Using a revocable trust or simple lady bird deed can save your heirs thousands of dollars in legal fees and court costs.
______ Do you have a business?
If so, you know the sacrifices you made to make your business succeed. Without proper planning your business could be left without a leader. Most business cannot survive the chaos that follows a lack of leadership. An estate plan allows you to appoint a decision maker to ensure your business continues to thrive if you are unavailable.
______ Do you want to make things easier for your loved ones when you pass?
Creating an estate plan allows for an orderly and efficient transfer of your wealth to your heirs. Without an estate plan, your heirs will likely have to spend unnecessary time, money, and energy in probate court trying to claim what is rightfully theirs.
______ Do you have a blended family? Children from another relationship?
If so, you need an estate plan. An estate plan is very important if you have children from different marriages. Without an estate plan, your estate will be distributed under the default rules when you pass. These rules are called the laws of intestacy. Depending on your state, the laws of intestacy will give most—if not all—of your wealth to your new spouse. This alone may not be a bad proposition. But remember, when your new spouse passes, his or her estate including assets inherited from you, will go to your spouse’s heirs—leaving your children empty handed. Preparing estate plan can prevent your children from being left in the cold.
______ Do you want to control who gets your money when you pass—and how and when they get it?
Do you have an heir who is irresponsible with money, or who is perhaps suffering from addiction? An estate plan allows you to leave specific instructions as to how an heir will receive their inheritance. Monthly or yearly installments? Upon the completion of a goal? An estate plan provides an opportunity to put a plan in place to address your specific needs. This can be instrumental in protecting a child or other loved one from themselves.
______ Do you want to protect your children’s inheritance from bill collectors?
A Trust is a very powerful estate planning tool. One of the benefits of a trust is that it can contain something called a spendthrift provision. A spendthrift provision can protect your children’s inheritance from unsavory creditors.
______ Do you value privacy?
Without an estate plan your estate can end up in probate court. Probate court is a public forum and all records are available to the general public.
______Do you have a child or other heir who is special needs?
If so, you need an estate plan. Specifically, you likely need a special needs trust. A special needs trust is a tool designed to hold assets for a person who suffers from a physical or mental disability. Special needs trusts are used to pass wealth to a disabled person without interfering with his or her Supplemental Security Income (SSI), Medicaid, vocational rehabilitation, and subsidized housing. Without a special needs trust, your special needs child or heir could lose their entire inheritance.
Did you answer yes to any of these questions?
If so, it is time to set up your free consultation with us today.
We Can Help!
An estate plan is crucial if you checked any of the items above. The next step is to determine what type of estate plan you need. Let our five star rated lawyer evaluate your needs and make a recommendations about your estate plan.
Our law office is located in Plymouth, Michigan. Our attorney provides estate planning services to all of Plymouth, Canton, Northville, Novi, West Bloomfield, Garden City, Westland, Commerce, Farmington and Farmington Hills.
Let us help you decide if you need an estate plan. Our law firm offers exceptional estate planning services in the areas of wills, trusts, special needs trusts, probate, living trusts, revocable trusts, charitable trusts, medical power of attorney, durable power of attorney, and more!
About the Author: Aaron R. Shahan is an attorney at Atlas Law, PLC. Aaron dedicates his practice to virtually all aspects of estate planning, elder law and probate.
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