The media is full of countdowns that serve as both fun diversions and means for keeping up with what is “of the moment” in popular culture, whether the subject matter is the best teams in college football, the most popular songs on the radio or the most attractive men/women in Hollywood. For something that may offer a more long-lasting benefit to you and your family, here is the second half of the “Top 10” list of reasons why you should create an estate plan, and do so now.
- To plan for the continuation of your business. Many businesses, especially small ones, fail to survive past the first generation. Several of the these businesses fail due to a lack of planning. In your estate plan, you can deploy many tools to ensure your business goes on after you die. You can transfer your ownership interest to the person you believe is best equipped to carry on the business’s activities, whether that involves a direct distribution through your will or living trust, or the use of other tools (such as life insurance) to give a trusted partner or employee the option of purchasing an ownership stake in the business. A carefully crafted estate plan may also help your family minimize or avoid entirely a potentially devastating estate tax bill. With no plan, a lack of a clear succession or debilitating bills could prove fatal to your business’s survival.
- To avoid probate . The process of administering a probate estate can be expensive and extremely time-consuming. The estate administrator is responsible for assimilating all of the assets, completing an inventory and appraisal of the estate’s assets, paying the debts and distributing the inheritances. In some cases, this can take many months or years and cost a significant sum of money. An estate plan with a properly funded living trust can allow your family to avoid the probate process completely. Some states have very short and simple probate processes, and a carefully crafted estate plan that properly uses non-probate transfer tools can help you ensure that you qualify for these simplified procedures, if you choose that path.
- To ensure your family’s privacy. In many situations, probate estates are matters of public record. Anyone can view the details of your estate simply by traveling to the court clerk’s office and requesting your file. As examples, consider how many details the news media were able to acquire and publish, almost immediately, regarding the estates of stars like Robin Williams, Philip Seymour Hoffman and Whitney Houston. An estate plan with a properly funded revocable living trust may help your family avoid this potential pitfall and ensure privacy. The process of trust settlement, unlike probate administration, is not a public matter. This added layer of privacy can be enormously valuable when it comes to protecting your loved ones from financial predators.
- To protect your partner. If you are in a relationship that is (whether by personal choice or the limitations of the law) not recognized by the law, you have a particularly strong need for an estate plan. In most places, your non-spouse partner not only would receive nothing from you financially under the laws of intestacy, he or she also would be completely frozen out of making any decisions should you become incapacitated. This could result in your partner being forced to leave the home you share and possibly not even being allowed to visit you in the hospital. Your estate plan, with powers of attorney alongside a will and/or living trust, can avoid these nightmare scenarios by placing your goals of protecting your partner’s place in your life, in addition to his/her financial well-being, into valid and enforceable legal documents.
- To ensure you have control. As mentioned previously, you already have a plan. Either you have the plan you laid out, or the one the state has laid out for you in the intestacy statutes. Whether your financial affairs, family situations or privacy needs are straightforward or extremely complex, if you’re like most people, you’d prefer to have the satisfaction that comes from knowing that the legacy you ultimately leave behind for your loved ones is exactly the one you wanted to create.
These are but a few of the many, many reasons to create an estate plan. Most everyone needs a plan, but exactly what that plan should look like is as unique as your estate. By taking the affirmative step of working with experienced estate planning professionals to get your plan, you can have the peace of mind that goes with protecting your loved ones as effectively in death as you have during your life.
Summary: This article and its companion list 10 reasons to get an estate plan of Legacy Assurance Plan. There are, of course, scores more reasons why a carefully crafted and customized plan can benefit you and your loved ones. You can only receive these benefits, though, if you take the pro-active step to start the process and get your plan right away.