There is a common misconception that estate plans are only for the ultra-rich – the top 1 percent, 10%, 20%, or some other arbitrary determination of “enough” money. In reality, nothing could be further from the truth. People at all income and wealth levels can benefit from a comprehensive estate plan. Sadly, many have not put their legal house in order.
According to a 2016 Gallup News Poll more than half of all Americans do not have a will, let alone a comprehensive estate plan. Gallup noted that 44 percent of people surveyed in 2016 had a will in place, compared to 51 percent in 2005 and 48 percent in 1990. Also, over the years, there appears to be a trend of fewer people even thinking about estate planning.
With estate planning, the sooner you start the better. Below are four reasons everyone can benefit from a comprehensive estate plan:
Forward Thinking Family Goals
Proper estate planning can do many things. The first step is to ask your goals. They may include caring for a minor child, an elderly parent, a disabled relative, or distributing real and personal property to individuals who will appreciate and maintain these assets prudently. Understanding what your family wants and needs are for the future is a great starting point for any estate plan. If you can sit down and spend time planning your vacation, you can do the same for your estate. Your future self, and your loved ones, will thank you.
Financial Confidence Now and After You Are Gone
One immediate benefit of having a finished estate plan in place is that you will likely feel in control of your finances, possibly for the first time. Many people experience a new sense of discipline in maintaining their finances which can help with saving for retirement, a big purchase, or other goal. Besides the personal benefit of financial control, an estate plan allows you to dictate exactly how and when your heirs receive an inheritance. This is important for minor heir or those who need additional guidance to manage their inheritance, like a disabled child.
An important aspect of a good estate plan is to mitigate against future and current risks. One example is becoming disabled and unable to support your family. Another is the possibility of dying early. Through an estate plan you can chose who will be in control of your personal assets, instead of the court appointing a legal guardian who will cost money and be a distraction for your family. While contemplating risk is never fun, preparing ahead of time ensures your loved ones will be prepared if an unfortunate tragedy occurs.
Estate Planning Maintains Your Privacy
Absent a fully funded, trust-based estate plan, a list one’s assets are available for public view upon death. This occurs when a probate court needs to step in. Probate is the legal process by which a court administers the deceased person’s estate. A solid estate plan will generally avoid the need for involvement by the probate court. Your family’s privacy is ensured through a well thought out estate plan.
The Bottom Line: Seek Professional Advice
There are many benefits to working with a professional team with estate planning. Estate planning attorneys, financial advisors, insurance agents, and others have a broader and deeper knowledge of money management, financial implications, and the law. When you work with a qualified team to make an estate plan you can rest easy knowing your family will be taken care of no matter what happens.
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