Nobody likes to think about their future demise, which is why many folks put off estate planning until it is too late to arrange their affairs carefully. Unfortunately, dying without a plan in place can create significant hurdles for your surviving family members, which is why meeting with a lawyer is so important.
Here are three reasons to take estate planning seriously and why you won't regret your efforts.
1. Help Relatives to Avoid Probate Court
If you pass away without a valid will or trust in place, your entire estate may automatically be transferred to probate court, which is a special branch of the judiciary system designed to divide assets after someone dies. Although many people assume probate court is fair and streamlined, the process can be incredibly expensive and time consuming.
In fact, legal professionals explain that since probate laws vary by state, your estate could be taxed up to 5 percent, and the entire division process could take up to a year. Although 5 percent may not seem like much, people dealing with an estate that has gone to probate may also have to pay other fees, such as appraisal costs and legal expenses, which can drive the price of the process up significantly.
Additionally, probate courts focus on settling the deceased person's entire estate, including paying back creditors. If you or your loved one passes away with a past-due phone bill or an unpaid medical expense, the value of your estate could dwindle significantly.
On the other hand, if you work with an attorney to create a will or trust, you might be able to avoid the probate process entirely. In addition to having a written document stating who gets what after someone dies, you also have more to divide, which can prevent unnecessary financial stress.
2. Plan for Special Circumstances
Every family is different, but unfortunately, the court doesn't always see it that way. If you pass away without an estate plan in place, the court might focus on distributing your assets evenly between surviving relatives — when that might not be your intention at all.
Oftentimes, people have friends who become like family members and direct relatives who they don't even communicate with. In instances like these, estate planning becomes imperative to help people to plan for special circumstances.
For instance, if you have a girlfriend or boyfriend who you really care about but you aren't especially close to your family, you could designate whoever you want to receive an inheritance — while leaving out people who might suspect they have a claim on your property.
Before you begin planning your estate with your legal team, think carefully about who you would want to receive an inheritance if you were to pass away. Keep in mind that creating a living trust gives you the chance to alter your plans later even after the final documents have been created and filed.
3. Keep Your Business Private
While wills are legal even if they are written on a napkin, the fact of the matter is that all wills have to be submitted to the court for processing, which turns the documents into public records. Unfortunately, this aspect of wills makes a lot of people think twice before scribbling one down — since it can expose your estate to criticism.
However, when you work with a lawyer, you can create other entities that help you to keep your business private, such as an LLC or a secured trust. Instead of giving your family members something to read and fight about, you can simply create a plan, assign an executor, and create peace after your passing.
Although estate planning can seem complex, working with a team like the law office of Travis Van Winkle LLC can make the entire process incredibly manageable. Whether you are thinking about creating a living trust or you simply need to draft a will, give us a call today to start protecting your assets.