The hustle and bustle of the holiday season is right around the corner and right after it the new year. However, before that all comes upon us, you may or may not know that October is National Estate Planning Awareness month. Here in the US it is a good time to remember the importance of an estate plan regardless of your individual circumstances.
While it can be said that everyone already has an estate plan due to the laws of intestate succession, that plan is a one size fits all created by legislators that do not know your story and your priorities. For blended families it can get really complicated and most plans that I do for those families are nothing like the intestate succession established by the codes of the various states in which I practice.
But a good estate plan is not only for after you die. It can help you manage your property while you are alive and take care of you if you become incapacitated. Having an estate plan in place will save your family members both from having to make tough decisions by themselves down the road, and can also save them from having to engage in the costly probate process.
Three essential estate planning documents everyone needs are a Last Will and Testament, a Durable Power of Attorney, and a Advance Health Care Directive (sometimes called a Health Care Power of Attorney and Living Will). Many estate plans also include a Trust. Trusts are most commonly used to bypass the probate process (when properly funded) entirely, which in turn saves your beneficiaries thousands of dollars.
If you have not yet created your own estate plan, you are not alone. According to the American Bar Association, approximately 64% of adults in America do not have a Last Will and Testament or Trust, but instead will have to settle for the statutory intestate succession of their estate.
When is the best time to prepare these documents? Now. If you are reading this article today, it most likely means that you are a competent, able adult at the present. None of us know what the future holds. Too many times we have seen people go from good to gone in a matter of days. I have even had a client die within a week of hiring me to do their estate plan. (She was not sick, but it was just her time)
So it is not just elderly individuals that need estate planning though. Having a plan in place is important for people of any age or income status. At a minimum, couples with young children need to designate a guardian in the event of a sudden death. In addition, you may want a Trust to provide staged distribution provisions for your young children.
In sum, there are many reasons to have an estate plan, and it is never too early to establish one. But with so many daily considerations in today’s world, it is increasingly easy to put off a process such as estate planning to another day. Good intentions are not enough when the need arises. So during National Estate Planning Awareness Month, make it a priority to talk to me about creating a plan, or have me review your plan if you already have one in place and have not reviewed it within the past three years. Your family will thank you long after you are gone.