Would you be surprised to learn that most American adults have no estate plan in place? You shouldn’t be. The fact is that there is still a tendency for many people to assume that estate planning is something that is only worthwhile for the richest of families. Far too many of us simply believe that our estates are too small to be worth the costs associated with preparing a will or other estate planning tool. Experience has shown, however, that inheritance planning is no longer just for the wealthy. You need to have at least some type of estate plan to help settle your affairs when your life comes to an end.
What is Inheritance Planning?
Inheritance planning is an important part of everyone’s end-of life planning, and involves all those things necessary for the successful transfer of wealth from one generation to the next. It utilizes a variety of different tools and strategies to accomplish that transfer, including well-known tools like wills and trusts, as well as lesser-known options like joint tenancy and payable-on-death designations for bank and brokerage accounts.
Effective inheritance plans also address common concerns like estate tax liabilities, asset protection, and more. The goal of every inheritance plan should be to provide the most efficient transferal of asset ownership to heirs, while preserving the value of those assets. Many people who engage in estate planning of this nature focus on avoiding probate and other costly transfer options, and instead use strategies that provide for a quicker and less expensive way to pass on wealth.
What Happens without a Plan?
Without a plan in place, assets can be tied up in court for many months or even years. Granted, some court intervention is required even in instances where the decedent has a will – since wills must be proved by the court and settled through the probate process – but the absence of a will can open the door for legal challenges that can further delay the settling of the estate.
Even more concerning is the fact that decedents who fail to create an inheritance plan end up forfeiting their right to choose their own heirs. If there is no will, then that decedent has no opportunity to express his or her last wishes. Instead, the state must refer to statutory law to determine the identity of heirs – a process that can have results wildly contrary to the decedent’s intent. An heir that you intend to disinherit could end up inheriting despite those wishes if the law names him as a lawful heir. Without a will, your wishes would be irrelevant.
What Type of Plan Should You Have?
There is no tried and true formula for determining the exact sort of plan that any given individual needs. For many people, a simple will can be sufficient for carrying out their wishes. This is especially true in instances where the estate is simple in nature, assets are few, and there are a small number of heirs. For more complex estates, you may need a more in-depth will, along with trusts and other tools. When you have heirs with special needs, for example, you will likely need something like a Special Needs Trust to ensure that your bequests don’t interfere with any vital government aid that the heirs might be receiving. Other special circumstances may require the use of different planning tools.
What Issues Need to Be Addressed?
To have a truly complete and comprehensive plan, there are many important issues that you must address. These include not only issues surrounding who gets your property when you die, but other vital concerns like:
- Incapacity planning. Your plan should address how decisions get made if you’re ever incapacitated due to injury or illness. Experts recommend that everyone have a financial power of attorney and some type of advance directive for health care to prevent the need for guardianship.
- Medicaid planning. If you end up in a nursing home, your entire estate plan could be destroyed by the high costs of nursing home care. You need a plan to secure Medicaid benefits to ensure that your nest egg isn’t consumed by long-term care costs.
- Retirement planning. Without a plan to fund your retirement, there’s likely no chance that you’ll ever meet your estate planning targets anyway. After all, you must have some type of wealth before you can leave assets to your heirs.
- Business and financial planning. All your financial activities and endeavors have an impact on your inheritance plan.
Can You Do It on Your Own?
There’s a growing tendency for many people to think that they can manage this planning on their own. Online websites and advertising campaigns promote the idea that we can all master our own estate planning efforts – usually by using some cheap do-it-yourself product we can find in some stationary store or at some online portal. But can you handle this on your own? Should you?
It’s relatively common for DIY estate plans to require corrections from actual attorneys. That shouldn’t come as a surprise, since so many DIY documents come with disclaimers to remind consumers that they are no substitute for professional legal advice. If you want your inheritance plan to withstand court scrutiny and do what it’s designed to do, your best option is to always seek out the assistance of a competent and experienced estate planning attorney.
The Planning Help You Need
Clearly, you don’t have to be rich to need inheritance planning. If you have any assets worth passing on to the next generation, then you have assets that warrant sound planning. At the Fouts Law Group, LLC, our team can work with you to evaluate your unique circumstances so that you can choose the estate planning options that will work best for your needs. We can help to protect your wealth and ensure that your plan delivers it to the right heirs when you die. To learn more about how planning can help you to secure your interests and safeguard your loved ones’ future, contact us online or give us a call at (404) 596-7520 today.
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