What is Estate Planning?
Updated: Feb 13, 2021
Estate planning with an attorney is important for everyone and not just the wealthy.
It’s very important to have an estate plan. You want to make sure the assets and property and investments you’ve worked so hard to accumulate during your life go to the people you love or organizations you care about. Estate planning can be a complex process, but you can make it easier with the support of capable, experienced legal professionals.
Having a comprehensive estate plan in place with under the direction of an attorney can help you feel more confident about the future and that your loved ones will be taken care of. It can help you achieve a variety of goals, wishes and objectives, including but not limited to:
Providing support and financial stability for your spouse or children.
Preserving assets for future generations.
Supporting a favorite charity or other worthy cause.
Ensuring all of your assets, including those that pass by beneficiary designation (e.g., retirement accounts and life insurance policies), will be distributed according to your wishes.
Minimizing expensive taxes and expenses.
Ensuring that individuals you trust and are capable can make decisions on your behalf in the event of your incapacity.
Your estate consists of everything you own and possess: your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, coins, stamp collection, musical instruments, personal possessions. No matter how large or how modest, everyone has an estate and you cannot take it with you when you die.
When that happens (and it is if not when), you probably want to control how those assets and cherished possessions are given to the people or organizations you care most about. To ensure that your wishes are carried out, you need to provide clear legal instructions stating whom you want to receive something of yours, what you want them to receive, and when they are to receive it. You will, of course, want this to happen with the least amount paid in taxes, legal fees, and probate costs.
That is estate planning—making a plan in advance, naming the people or organizations you want to receive the things you own after you die, and taking steps now to make carrying out your plan as easy as possible later. However, good estate planning is much more than that. It should also do the following:
include instructions for your care and financial affairs if you become incapacitated before you die
include arrangements for disability income insurance to replace your income if you cannot work due to illness or injury, long-term care insurance to help pay for your care in case of an extended illness or injury, and life insurance to provide for your family at your death
provide for the transfer of your business at your retirement, disability, incapacity, or death
name a reliable guardian for your minor children’s care and inheritance
provide for disabled family members with special needs without disqualifying them from government benefits
provide for loved ones who might be irresponsible with money or who may need protection from creditors or in the event of divorce
minimize taxes, court costs, and unnecessary legal fees, which may include funding assets into a living trust, completing or updating beneficiary designations, or otherwise aligning your assets with your estate plan
Importantly, estate planning is also an ongoing process, not a single event. You should review and update your plan as your family and financial circumstances (and the relevant laws) change over your life
Estate Planning Is for Everyone. It is not just for retirees, although people do tend to think about it more as they get older. And parents with children especially need to have an estate plan especially in light of Covid-19. Unfortunately, we cannot successfully predict how long we will live, and illness and accidents happen to people of all ages.
Again, Estate planning is not just for the wealthy either, although people who have accumulated wealth may think more about how to preserve it. Good estate planning with an attorney is often more impactful and value-added for families with modest assets because the loss of time and funds as a result of poor estate planning is more detrimental. Estate planning with an attorney is important for everyone and not just the wealthy.