Why is estate planning so important? Even if you have a small estate, estate planning allows money and property to be distributed according to your final wishes.
Your assets include any real estate you own, bank accounts, stocks, bonds, personal property, and retirement accounts; and bank accounts. What happens to your assets when you pass away? You may think that these items automatically stay with your family. Unfortunately, this is not always the case. If you die without a valid will in place, the state may divvy up your assets according to local laws.
A large number of people, even those who are already retired, don’t have an estate plan. Others have documents that are out of date. The importance of a valid will and estate plan are of the utmost importance to ensure that your family is able to enjoy the rewards of your hard work when you pass away. If you die without a will, the state can make decisions about allocating assets, which may come at a high cost to the loved ones you leave behind.
Every adult should have:
- A will. This document spells out who you want to manage your estate, who will receive your belongings, and who will become the guardian of any minor children or disabled family members when you die.
- Durable power of attorney. Who will handle your finances if you become incapacitated or disabled? Without a durable power of attorney, no one may be able to access your bank account or any other property in your name without a lengthy legal proceeding.
- Advance directive. All of the documents that make up an advance directive allow you to state your preference for continued health care if you become terminally ill. In a health care power of attorney, you name your spouse or a trusted relative who will make health care decisions for you if you are unable to do this on your own.
Regardless of whether or not you have a will, any property that’s jointly owned with someone else will go to the joint owner when you pass away. An asset with a designated beneficiary, like an individual retirement account, will go to this designated beneficiary.
Estate planning is best left to an experienced professional. If you haven’t carved out a solid estate plan, make an appointment to meet with an experienced estate planning lawyer in your area.