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Everything You Need to Know but Don’t Want to Think About
(ARA) - You know you should have a will. You may think about it from time to time, and maybe you’ve even put it on your “to-do” list. But if you’re like most people, you’ve never actually gotten around to having a will drawn up. Estate planning professionals estimate that a whopping 70 percent of Americans don’t have a will.
There are many reasons people put off estate planning. One reason is simply that no one likes to think about their own mortality. But the truth is, there is no way to avoid the fact that you won’t be able to dictate how your assets are divided up from beyond the grave --unless you have an estate plan. “Every family should have an estate plan to protect assets like a home, insurance proceeds, family heirlooms and more,” says Michael W. Halloran, a director with the National Association of Estate Planners and Councils.
Another reason people never get around to drawing up a will is the belief that they don’t have enough assets to need one. “People mistakenly think that only the wealthy need estate planning,” says Halloran. “But everyone needs a will, unless they are happy with the one the state has provided for them.”
Halloran is referring to the fact that if an individual dies without a will, or “intestate,” the state decides what happens to their property. You can make the process much easier on your family by putting your intentions in writing, either in a basic will or a will plus a living trust. A will can specify who gets what after you die, while a living trust can also help you avoid probate, reduce estate taxes or set up long-term property management. Both are part of a good estate plan.
The average probate can go on for months before the beneficiaries get anything. Not to mention that probate eats into their inheritance, since lawyer’s fees and other court costs will be taken out of your assets. Property transferred into a living trust before you die doesn’t go through probate. Instead, the trustee you have appointed merely transfers ownership to the beneficiaries you named in the trust.
If privacy is a big concern for you, living trusts also offer the advantage of being shielded from public disclosure. While a will becomes a matter of public record, the terms of a living trust are not required to be made public.
Even if you establish a living trust, you’ll still want to have a will as well. If you don’t have a will, any property that isn’t included in your trust will go to your relatives in an order determined by state law, and this may not be the distribution you would have wanted.
For example, state law usually does not recognize the different needs of your children nor their stage in life. Most families have children with unequal needs, capabilities and requirements for care based on their age, health, education and other factors. For example, if you have minor or disabled children, do you want the probate judge appointing their guardian?
It may all sound overwhelming at first, but there are many professionals trained and qualified to help you make your estate planning effective. Check with your state or local bar association for a local Certified Estate Planning attorney, or try the state CPA association. The National Association of Estate Planners and Councils (NAEPC) offers a list of members who have earned the special designation AEP (Accredited Estate Planner).
Estate planning is appropriate for any stage of life -- if you don’t prepare for the inevitable, you may create needless heartache and loss for those left behind. Your estate plan should allow you to give what you want to whom you want to receive it, the way you want them to receive it and when you want them to receive it. Your estate plan should save every tax dollar, professional fee and court cost legally possible. Use good estate planners to ensure things work the way you want.
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