Is an Estate Plan Necessary?
An estate plan may seem unnecessary on the surface if you don’t own an “estate” in the way that the term is used to describe a large and prestigious piece of land that has multiple structures on it.
In the context of estate planning, we’re not talking about real estate, but your overall personal estate that you’ve massed over the years, which consists of all of the property and assets that you currently own.
Here’s everything you need to know to decide whether an estate plan is necessary for you.
What is an Estate Plan?
An estate plan is a set of documents that outline how your estate will be distributed and managed in the event of your passing or severe debilitation. In essence, it is a more comprehensive approach to simply writing a will.
So, is it really necessary to have an estate plan and a will? While it isn’t a mandatory document, having a comprehensive estate plan is recommended because it provides the following three benefits:
Avoiding the Probate Process
If you’ve ever known anyone who was supposed to inherit property, money, or other assets and wound up waiting a long time to actually receive their inheritance, then you’ve heard of the perils of the probate process.
Probate is the leading reason why you need an estate plan because it considerably delays the execution of your will for a period of up to 24 months from the date of death.
With the plan in place, the probate process can be avoided altogether. The idea of making your loved ones wait for two years to receive their inheritance is enough to make most people want an estate plan in and of itself.
Eliminating Estate Taxes
This is a very simple but worthwhile point to mention because it’s possible to lose anywhere from ten to thirty percent or more of the value in your estate due to taxes and fees that are taken out during the probate process.
With an estate plan, you can completely avoid that unnecessary loss by setting up AB or ABC Trusts that are scheduled to be established by the person who you’ve given Power of Attorney to.
Saving Your Beneficiaries the Hassle
The fact is, with no estate plan in place, your loved ones are going to be in for a long wait, a loss of a significant portion of their inheritance, and the burden of having to deal with court proceedings.
An estate plan can be created in a single day and will undoubtedly save your family, associates, and other beneficiaries many days of grief and hassle.
Consult with an Advisor to Begin an Estate Planning Process
If you’ve decided that the plan is necessary for your situation based on the advice given above, you might be ready to start putting your plan together immediately.
However, before you rush into thinking that this is something you can do on your own, keep in mind that you’re going to need the assistance of an estate planning attorney.
Additionally, before appointing an attorney, you may want to consult with an advisor that can help you gain a better understanding of the process.
That way, you’ll already know exactly what to look for when comparing estate planning services and attorneys.