- Most Americans (55%) say they have no will or other form of estate planning
- Under the Tax Cuts and Jobs Act of 2017, the estate tax exclusion has doubled (until 2026)
- Trusts and other legally-protected vehicles of estate planning can ensure your wishes are carried out as intended
If there’s one thing modern Americans have gotten bad at, it’s planning for the future after their possible death. A majority of Americans say they do not have a last will and testament drafted, let alone an estate plan. Unfortunately, what these people do not realize is that estate planning can be for adults of any age — and potentially any income level.
55% of Americans have no will or estate plan to speak of, according to a 2016 Gallup poll. Not having a legal document in place to demonstrate how you want your assets handled after your death means that the state probate court will weigh in on the matter. Probate courts are notoriously slow, and they are concerned far more with following the procedure of intestate succession compared to finding evidence of the deceased’s wishes.
Even with a will in place, inheritances can often turn out different than the deceased intended. Tax laws, complex legalize, and contested claims can all derail plans. With a living trust or other options provided through Atlanta estate planning attorneys, though, individual’s can feel much more confident that their legacy will be honored as intended.
Rest assured, estate planning is not just for the very rich. Far from it, in fact. It is necessary for anyone who has concern for their beneficiaries and wants to ensure that their posthumous wishes are executed as planned.
To help illustrate exactly why estate planning can be necessary to a broad range of situations and income levels, consider the following 3 biggest reasons you might need an estate plan.
You Want Your Estate to Avoid Probate Proceedings
There are many myths about the American court system, but one of the most harmful is the idea that drafting a will means that you no longer have to worry about your wishes for your legacy. The fact of the matter is that wills aren’t always airtight, and they must go through probate. Having a will therefore doesn’t always mean that your intentions are legally enforceable.
A will usually won’t help an estate avoid probate courts. These courts are meant to interpret the will but to also give all other possible claimants and outstanding creditors the chance to get a piece of the estate, too. Notice of the probate hearing must be filed to all heirs, and it also gets posted publicly just in case the deceased owed debts to certain parties.
In other words, much of the estate is still potentially up for grabs as surviving family members contest the will or people arrive claiming to have debts owed by the deceased. These situations aren’t likely to completely nullify a will’s intended execution, but they can delay its implementation for months or more as well as diminish the size of the estate.
All of this is not to say that probate court proceedings are unpleasant for everybody. For those without a certain level of wealth within their estate, the costs and care needed to establish a trust may outweigh the convenience of avoiding probate proceedings. But for anyone who wants privacy or wants their intentions to be enforced precisely, a trust can provide that security.
You Want to Plan for Specific Situations and Complications
Most people who draft a will know that they must keep it updated to reflect their current life situation. They regrettably do not have this luxury once they have passed, which means that the intentions of a will or an estate plan can become clouded with uncertainty.
What if, for instance, a beneficiary remarries? Or, perhaps you are concerned about a young beneficiary mishandling their finances after an inheritance? A legal entity like a living trust can offer specific instructions in either scenario. You can request that only your biological children are eligible to receive an inheritance, for example. Or, you can put a clause in your will that requires your heirs to demonstrate responsibility before they inherit their full benefits or requires that benefits only apply to certain transactions.
Setting up a trust for charitable donations is a particularly relevant scenario for individuals who have a sizeable estate and wish to leave a legacy. While a charity can be named as a beneficiary in your will, a charitable lead trust or charitable remainder trust provides much more specific instructions.
Your Non-Liquid Assets Create a Sizeable Estate
Anyone who thinks “I don’t have enough money to worry about estate planning” should first ensure that they are counting all properties and benefits that are included in an estate. Life insurance benefits, for instance, can be quite sizeable, potentially opening your beneficiaries up to taxes or even creditor liens. With an estate plan, you can separate these benefits or provide special instructions for them, such as stretching payment distributions out over decades.
There’s also a whole new category of concerns if you own your own business. A will can only cover so many instructions in regards to how a business is managed, handled, or transferred upon your death. A business continuity component of an estate plan, however, can address all of these concerns with specificity.
Even with all of these concerns, though, most estate will not trigger estate taxes unless they are of a significant size. As of 2018, an individual can have an estate up to $11.2 million in value before moving past the estate tax threshold, and widowed spouses can combine their exclusion for up to $22.4 million in exemptions.
Talk to Atlanta Estate Planning Attorneys to Decide Whether a Trust or Other Form of Estate Plan Is Right for You
Not every person outright needs an estate plan, but plenty of people also pass up the opportunity to create one when it would absolutely benefit their intentions.
No matter how wealthy you are, you, your heirs, and your legacy can obtain benefits from developing a comprehensive estate plan to supplement your last will and testament.
You can talk to our Atlanta estate planning attorneys to determine which legal strategies would be appropriate given your current holdings and your ideal scenario of who inherits what. Don’t wait until it’s too late! Get started on your plan for the future today.
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