In this article, we’re going to look at ten things that estate planning can do for you. The goal is to help educate you on the benefits of estate planning and give you a better idea of why you should get your estate plan taken care of as soon as possible.
#1 – Provide For Your Family
Without an estate plan in place, your family will get less and it will take them longer to get it. This means your loved ones will be left in limbo and might end up without enough money to pay bills and other living expenses. It’s not uncommon for families with an unexpected death to nearly fall apart due to the financial strain in the weeks, months, and years to come.
Good estate planning will make sure that your family is provided for and not left to face financial ruin once you’re gone.
#2 – Keep Your Children Out Of Child Protective Services
As unpleasant as this next thought is going to be, take a minute and ask yourself what would happen to your kids if you and/or your spouse were involved in a major car accident on the way home from work tomorrow?
Really, think about it. Who will pick them up from school or daycare? Where will they sleep that night and the nights to come? Who will ultimately end up as their guardian?
If you don’t have an estate plan in place, than you might not like the answers to these questions. Why let your kids end up in Child Protective Services while the courts sort out who will serve as their guardian?Why leave that decision up to the courts at all? Do you really want a judge to decide who will raise your kids without any input from you or your spouse?
#3 – Minimize Your Expenses
Do you know where most of the money goes when people don’t have a good estate plan? Attorney’s fees and court costs.
When you die without an estate plan (and without a living trust, in particular) the courts are forced to handle everything: the distribution of your property, the guardianship of your children, the dissolution of your business. This is known as “probate,” and it get’s very expensive — easily exceeding $10,000 for even modest estates. That’s money your family and kids could’ve used for living expenses and other bills, but instead it’s just lining the pockets of your attorney.
#4 – Get Property To Loved Ones Quickly
You have two options here. Option 1, your family has to wait anywhere from 3-9 months to get anything after you die. Option 2, your family gets money they need to pay bills, to pay for your funeral, to pay for your outstanding medical bills, and to pay for anything else they need right away and without delay.
Which one would you choose? Good estate planning let’s you avoid the big delays that can put a real financial strain on your family.
#5 – Save Your Family From The Difficult Decisions
Can you imagine trying to decide when to pull the plug on your spouse who is in a coma or similar condition? Or deciding how his or her remains should be handled?
Those are heart breaking decisions that no one should have to face. You can ease this burden by thinking about this kind of thing in advance and planning ahead for it. You can specify in your estate plan how you want end-of-life care to be handled and what kind of disposal arrangements you want made for your remains. And there’s no one better to make those decisions than you.
#6 – Reduce Taxes
Every single dollar that you pay in taxes is one less dollar that your family will have for paying bills and other expenses. There are numerous tax reduction strategies that you can use to keep as much money in the hands of your family as possible.The key is to start tax planning sooner rather than later — and definitely not to wait until it’s too late.
#7 – Make Retirement Easier
You might be surprised to hear that estate planning can actually benefit you while you’re alive, not just your family after you’re gone. Healthcare in particular is an area where estate planning can benefit you enormously down the road by making sure you’re eligible for government benefits like Medicare (that you’ve been paying into most of your working life anyways, so you might as well get something back), that can significantly reduce your healthcare costs and leave more money to your loved ones.
#8 – Plan For Incapacity
Estate planning is not just about death. It’s very common for people to become incapacitated by an accident or sudden medical episode – like a stroke – that leaves them unable to manage their financial affairs.
If this happens to you, who will take care of paying your bills or managing your healthcare? A power of attorney designation for both financial and healthcare decisions can save your family a lot of time and money and make sure everything is handled according to your wishes.
#9 – Support Your Favorite Cause
You might have heard that Mark Zuckerberg (the founder of Facebook) decided to join Bill Gates and Warren Buffet in leaving the vast majority of his fortune to charity instead of his family. Even though you don’t have billions of dollars to leave to charity, you can still make a difference by supporting your favorite educational, religious, or other charitable cause. Even if it’s just a hundred dollars, that money can help others and make a difference in their lives.
#10 – Make Sure Your Business Runs Smoothly
If you are a small business owner, then you absolutely must have an estate plan. It’s one of the most important things you can do and is really not optional. Without one, your business will likely fall apart quickly and completely if something happens to you, and that can cause incredible financial hardship on your family.
You have the opportunity to provide for an orderly transition to someone else and continue the business by spelling out what happens if you become disabled or die. Don’t do a disservice to your family by leaving these kinds of ends untied.
If you want to discuss your estate planning needs with a Reno estate planning attorney, contact us to schedule a free initial consultation.