Sadly, estate planning is one of those things that even people with good intentions may put off until “tomorrow,” only to never have the opportunity to revisit it before tragedy strikes. Without estate planning, you could lose out on the priceless opportunity to control your own destiny.
There are 10 basic reasons why estate planning is important (this discussion will continue in our next post as well), and why you need to handle it sooner rather than later:
- To protect your immediate family – having an estate plan in place not only protects assets for your family’s future, it also establishes the person (or people) you want to take care of them in the event of your death. You can, with time and reflection, name someone appropriate to raise your minor children, instead of having a judge appoint someone who looks good “on paper” but might not be the best fit. Estate planning will also allow you to set aside a trust for your children’s college education, first home or wedding.
- Avoid probate complications – the probate process can eat up valuable time during which assets that might be desperately needed by your loved ones can sit idle. Planning ahead can help you speed up the process of transferring assets to your heirs quickly and efficiently.
- Incapacity and disability planning – through powers of attorney, health care directives and similar documents, you can express your wishes for your care in the event of incapacity or disability, and appoint someone to make important medical and financial decisions for you should the need arise. Without a formal appointment as an attorney in fact or agent, someone who, for example, isn’t related to you (even a long-time partner or trusted friend) might not be able to have any input into your care decisions or even receive information about your health.
- Cut down on estate costs – establishing asset transfers ahead of time (and avoiding probate and estate taxes whenever possible) can significantly minimize the amount of estate assets that are used up to cover costs.
- Make executor and/or trustee selections – doing this ahead of time ensures that the person or persons you are approve of are in charge of these important duties. If you leave it up to the court, they may end up selecting the last person you’d actually want in charge.
We’ll pick up the remaining reasons why you need estate planning in our next post.