If you are currently unprepared from an estate planning perspective, you are doing your family a disservice. The process is simply one of the core responsibilities of adulthood, and you should take action sooner rather than later to put a plan in place. And if you created a will or a trust years ago, a review is in order, because revisions may be necessary.
Don’t Take Chances
Studies consistently show that most American adults have no estate planning documents at all. A surprising percentage of older people have been remiss, and as you might imagine, a very small percentage of younger adults have done any planning.Some folks that are not responsible for anyone else may not have a great deal of motivation, and this is understandable. However, estate planning is an absolute must for the parents of dependent children. You should be certain that there is an income replacement vehicle in place, and life insurance will usually be the right solution.
The matter of guardianship is another thing to take into consideration. If both parents were to pass away in an accident, who would care for the children? This question is even more profound for single parents. With the proper planning, you can name someone to act as the guardian of your children if it ever becomes necessary.When you do the responsible thing and establish an estate plan as a younger adult, you go forward with peace of mind, and you gain an understanding of the importance of the process. As time goes on and your life situation changes, you can adjust your plan accordingly. Ultimately, your legacy goals can be embedded into a broader financial plan as you continue to mature.
Custom-Crafted Estate Plan
There is no one-size-fits-all, cookie-cutter estate plan that is right for everyone. Far too many people assume that you can simply create a last will and leave it at that. In reality, a will is not the right choice for many people, so you should definitely explore your options.Things are not as simple and straightforward as they may appear to be on the surface when you use a last will as your primary vehicle of asset transfer.
If you were to create a will, you would name an executor to act as the estate administrator. This person would not be able to follow your instructions and act independently after your passing. The will would be admitted to probate, and the court would provide supervision during the administration process. One negative that goes along with probate is the fact that the inheritors do not receive their bequests until the estate has been closed by the court.This will typically take around nine months, though complex cases can be stalled in probate for much longer. Expenses accumulate during the process, including a filing fee, the executor’s remuneration, legal and accounting charges, appraisal fees, liquidation costs, and incidental expenses.
The money that is spent during probate is essentially coming out of the pockets of the inheritors.These are a couple of the drawbacks, but there are a number of others. To avoid these negatives, you could choose to utilize a revocable living trust instead of a last will. The trustee that you name in the document would be empowered to distribute assets to the beneficiaries outside of probate after you are gone.This is one of multiple different types of trusts that can be used when you are planning your estate. The right choice will depend upon the circumstances, and this is why it is so very important to discuss your unique situation with a licensed estate planning attorney.
Any well-constructed estate plan will include an incapacity planning component, because many elders become unable to communicate sound decisions at some point in time. With a living will, you state your preferences regarding the use of life-sustaining measures. A durable power of attorney for health care would be included to name someone to make medical decisions on your behalf (matters that are not covered in the living will). For financial decision-making, you can add a durable financial power of attorney for health care.
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If you would like to preserve your legacy in the optimal manner, we are here to help. You can call us at 312-753-6000 to request an appointment, and there is a contact form on this website that you can use to send us a message.