As 2017 National Estate Planning Awareness Week comes to an end, Davidson Law Firm attorney, Drew Benham, shares her thoughts on why estate planning is so important and how the process doesn't need to be difficult, expensive, or scary. Check out her article below and contact us when you're ready to discuss how having an estate plan in place can help you rest easy.
Did you know that more than one-half of Americans have not done any estate planning? When it comes to Americans with children under the age of 18, the number is even lower – only 36% have planned for their estate in the event of their death. While contemplating the end of life is an unpleasant task, it is one that every adult should take the time to address. Having an estate plan with a will and possibly a trust will lighten the burden on your loved ones and will reduce their stress levels in a time of emotional turmoil.
When an individual passes away they leave behind their money and worldly possessions, which make up their estate. The estate is made up of the individual’s real estate, financial accounts, personal property, and any other property which the individual owned at the time of death. The estate then goes through a court process called probate, which transfers those assets to another owner. Probate is designed to give public notice of the death and allow creditors of the deceased time to file a claim. After creditor claims are paid, the assets are distributed to the beneficiaries. Establishing an estate plan with a will gives you the ability to identify how and to whom your assets are distributed. If you have young children, a will is especially important even if only to name a guardian who will take care of them in the event of your death. If you die without an estate plan and will in place, a judge, who may not know you or your family, will make the decisions concerning who will care for your children and how your assets will be disbursed.
Wills and trusts are not the only estate planning devices, however. You should consider other documents that may provide much-needed assistance in unforeseeable circumstances. A power of attorney, for example, will allow an identified person, be it a spouse, partner, parent, child, or friend to sign on your behalf in the event that you are unable to do so yourself. Arguably, this is just as important as a will. Who will pay your bills if you are unable to sign on your own behalf? Who will be able to access your accounts? A power of attorney allows the person of your choosing to maintain your affairs if or when a time comes when you are unable to do so yourself.
Similarly, a healthcare power of attorney will allow another person to make medical decisions for you. Every adult should have someone appointed to make these important decisions. Take, for example, a young adult who goes to college and becomes ill or injured. Because that child is over the age of 18, his or her parents are not legally entitled to make decisions or obtain information concerning their child’s medical status. Living wills (also known as advanced health care directives) can also be helpful by identifying certain medical preferences, such as whether or not to be resuscitated, placed on life support, or receive certain medical treatments.
Even if you have a previously executed will or estate plan in place, you should consider how long it has been since the last time you reviewed the documents and whether or not a change in circumstances may have necessitated a modification. Has it been longer than five years? Since its execution have you experienced any major life events such as marriage, divorce, births, or deaths? What about any changes in personal or business assets? A good rule of thumb is to review your estate documents every five years to determine if they need to be updated to reflect your current life circumstances.
If you think it’s time to start thinking about your estate plan, call Davidson Law Firm to set up a consultation. Ensuring our clients are prepared and protected is what we do best.