The notion that estate planning is only something that wealthy people should worry about is a very common misconception in America. As an estate planning attorney in Palm Desert, it’s my duty to inform you that this notion is categorically false! Regardless of your income, net-worth, or social standing, those who do not have a proper estate plan in place are risking long-term, negative consequences for their heirs should they pass away. In an effort to dispel this myth, our elder law attorneys at Cal Elder Law have put together the following list of reasons why you absolutely need an estate plan in place!
Protects Families With Young Children
Even though no one enjoys thinking about the possibility of their untimely demise, parents of small children must prepare for this scenario, however unlikely. To ensure that minor children are cared for in a manner approved of by the parents, guardians are named in the estate plan. It is these individuals who will care for the children until they turn 18, in the event the natural parents pass away. No one wants the courts determining who will raise their children, which is exactly why we regard this as the top reason having an estate plan is necessary.
Probate is something to be avoided at all costs. This is because it is a long and expensive process, during which the courts decide who receives which assets. A stranger may not make the same decision the deceased individual would have made, but after the person’s death — it is too late. If a suitable plan has been drafted, probate and all the problems with which it is associated can be completely avoided.
Prevents Heirs From a Significant Tax Burden
Estate planning was designed to protect loved ones from a variety of negative situations after the owner of the plan has passed away. Protection from the IRS falls under this umbrella. Transferring assets to heirs in a manner that creates the smallest possible tax burden for them is an essential part of estate planning. In the absence of any aforethought to this matter, the amount heirs may owe to Uncle Sam could be substantial.
Prevents Assets From Going To Unintended Beneficiaries
Regardless of the net worth of one’s assets, no one wants his or her property or money going to a person for whom it was not intended. Even if it is simply a modest bank account or a small home, all people should be in control of who receives their assets in the event of their death. Those who have considerable assets must also have such a plan in place, as long lost relatives have a tendency to suddenly reappear when a wealthy individual has passed away.
Asset protection planning is undoubtedly a very important reason why many individuals meet with an estate planning attorney to create or update their plan. Anyone who even suspects that a lawsuit may be forthcoming should immediately put a plan in place to protect his or her assets. Such a plan protects assets not only for the person while he or she lives, but also for beneficiaries and heirs following the person’s death.
Eliminates Family Turmoil and Court Fees
Another reality that few individuals want to think about is arguments between family members that occur when a person dies in the absence of a will and without having named beneficiaries in advance. Such wars over money and assets can quickly get ugly and often they are solved through the courts, with the deceased person’s loved ones pitted against each other. This not only creates a significant amount of debt in the form of court costs and attorneys fees, it can also create bad family relations for many future years. This is just another reason why estate planning is a vital financial tool that should never be overlooked.