9 Reasons To Stop Putting Off Estate Planning
Estate planning might not be on your to-do list for this week. In fact, it might not be on your to-do list for the next decade. Most of us expect to enjoy many more years of life and feel there is always time to put estate plans into place.
In the event of unforeseen tragedy, however, those without estate plans could leave their families with a huge mess that will add to their stress levels in a time of grief. That’s why it’s imperative to do your estate planning now — especially if you have children or multiple assets. Here are nine reasons why you should not put off estate planning.
1. Financial Protection for Your Spouse
If you have a spouse, you will want to make sure he or she is protected and taken care of. If you pass away before your spouse, you can take care of them with a life insurance plan.
This aspect of estate planning provides your spouse with financial security and allows for them to pay for your final expenses. You wouldn’t want your spouse to struggle after your death, so it’s important to set up an estate plan for their wellbeing.
2. Probate Avoidance
When someone passes away without a plan, the estate is delayed. Since the state is now handling your assets, there are fees and added complications. (Musician Ike Turner’s estate is still being litigated 11 years after his death.)
Your family could end up with significantly less money, and your estate will become part of the public record. To avoid probate, lay out an estate plan as soon as possible.
3. Protection of Your Retirement Funds
Depending on your stage in life, you might have quite a bit of money in your retirement fund. If all goes well, you may end up using most of it. If you pass away sooner than expected, however, you could have a large chunk of money sitting in your retirement fund that is unaccounted for.
This money could be distributed by a court instead of according to your wishes. To protect your heirs from heavy tax consequences and to ensure your retirement funds go where you want them to go, you need an estate plan.
4. Financial Protection for Adult Children
When your adult children marry, half of your assets could pass to their spouses. You may be fine with that arrangement, but what if your child gets divorced? What if they die prematurely and their spouse remarries?
Your estate could pass to someone else’s grandchildren instead of your own. It’s important to lay out a line of succession so your assets go to your children. A clear estate plan will help prevent tension later.
5. Financial Protection for Minor Children
If you have children still living at home or if you are providing financial assistance to a grandchild, the need for an estate plan becomes even more important. Minors can’t raise themselves and it’s incredibly important you list a new guardian for your minor child.
In the event of your death, a court would appoint a guardian for them — and it might not be whom you had in mind. For their protection, name a guardian in your estate plan and lay out the way this guardian will benefit from your assets to assist with raising your child.
6. Financial Protection for Blended Families
Your family might be composed of children from several different marriages. This can be a difficult situation financially — especially if a head of household passes away prematurely.
To ensure that everyone gets a fair portion of your estate, you must have an estate plan. Without it, your family could go through a number of financial arguments that erodes their relationship and those you love the most could find themselves without the funds they need for their futures.
7. Financial Protection for Special Needs Children
Your family might contain a member with special needs. Special needs children, whether they’re grown or not, often need greater financial care. If you don’t have a plan, your special needs child could be left without SSI or Medicaid benefits.
As part of your plan, you would set up a Supplemental Needs Trust for him or her so they could stay eligible for government benefits after your death. That way, they don’t have to rely on their inheritance to take care of themselves.
8. Managing Your Own Affairs
Today, you’re competent and are more than capable of managing your own affairs. A sickness, disease, or accident, however, could render you incapable before you have the chance to make a plan.
If you’re without a plan, a court will select someone to handle your affairs and many times, it’s not the person you would have chosen. If you make a plan ahead of time, you’re able to pick your representative through a power of attorney to make personal and business decisions on your behalf.
If for whatever reason you die without leaving a will, your assets could pass to your heirs according to intestacy. Intestacy is the state law regarding inheritance when no will is involved. With intestacy, your estate won’t be given out in the way you hoped. If you want to leave your estate in a certain way, an estate plan allows you to direct the division of your assets. That way, your family will receive the exact gifts you want them to receive.
An estate plan helps protect your family from strife, loss of funds, and financial stress. It’s never too early to create an estate plan and protect their future, so start looking into estate plans today.