Everyone has an estate, and all of your property, both physical and intellectual, forms that estate. You don’t have to be rich or have a certain amount of assets to use the word “estate”. People think estate planning is for the rich only because they usually hear about it in that context; a movie shows a wealthy family gathered around a lawyer reading from a will, an actor’s estate gives permission to use his image, and so on. In reality, you have an estate even if all you have are the clothes you are wearing. While it is vital to create a plan for your estate if you have a lot of property and money, it’s also important to develop a plan if you don’t have a lot.
What Does Estate Planning Do?
Estate planning gives your family a roadmap to follow when you die, covering tax issues, distribution instructions, and even burial preferences. It protects your estate from probate laws that could seriously delay your family’s ability to settle your affairs, and it sets out instructions for custody and care of children and pets. An estate plan does not have to be complicated; in fact, it can be very simple, with just a will stating who gets what after you die.
When you die, your state will require that your property and money go through a court process called probate. This is when your will is validated, and your property and money can then be distributed according to your instructions in your will. If you don’t have a will, then the court process is called an administration whereby the court distributes your property and money according to state intestate (no will) law. Probate and administration (intestate) proceedings can take a long time and cost a lot of money. Small estates with wills can go through a less expensive, faster process, but they still have to be approved by the probate court. Your estate plan can be set up so that you can avoid probate, but a will alone is not enough to do that. One or more living trusts, along with other techniques, can help accomplish that.
Creating an estate plan now also ensures that dependents in your care and your pets are provided for after you pass away. You also have the ability to exclude people from benefiting from your estate if desired.
What Happens If You Don’t Plan Your Estate?
Suppose you die without leaving at least a will. In that case, your estate is divided by the court according to state intestate (no will) law, regardless of your wishes, and your family could face expensive estate taxes. If you don’t set up burial instructions before you die, your family could end up fighting over what to do with your body, or they could face the cost of burial without help, which can be very expensive. If you own a business and don’t designate what will happen to it after you die, the business could fail or be the subject of family and partner disputes. In other words, if you don’t do any estate planning now, your beneficiaries may not benefit, your wishes may not be followed, and your heirs may have to deal with an administrative mess.
It doesn’t have to end up that way. Contact the Law Offices of Lawrence Israeloff, PLLC, for help planning your estate. We can help you create a will and living trusts, determine what property may be subject to probate, and discuss additional aspects of your estate that you need to address, such as contacting other agencies to arrange for life insurance or pre-pay for funeral expenses. It may sound like a lot now, but the time you spend planning your estate today will make the future easier and cheaper for your family to bear.