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Estate Planning: Not Just For The Rich

A common misconception about estate planning is only “wealthy” people need it. In reality, there are countless benefits associated with having a comprehensive estate plan no matter your tax bracket.   In most situations, it is far less costly to have an estate plan than to attempt to go through the probate process to administer and distribute your estate. So, how can you benefit? 

What if I’m single? 

If you are single with no children, your estate will very likely pass to your closest biological family member according to state law. If you would rather your estate go to nieces, nephews, friends or charity, you will need an estate plan to designate how your assets will be distributed. 

Additionally, the family members designated by state law may not be the ones you’d prefer to be making decisions for you, should you become incapacitated.  You should have a Healthcare Power of Attorney, Financial Power of Attorney and an Advance Directive designating important decisions and decision makers. These various documents will help ensure that your wishes are followed if someone needs to make financial decisions on your behalf or consent to a surgery for you. These documents will also safeguard against your family spending a lot of time, money, and emotional energy fighting over decision-making power.

I’m married but we don’t have, or don’t plan to have, children. What happens? 

If you are married and have no children, generally, most of your property will go to your spouse, depending on state law and the nature of the property. You may wish that more of your property go to parents, siblings, other family members, or charity. The only way to direct how your property is distributed upon your death is with an estate plan.

I have children.  Now what? 

If you have minor children, you should identify someone to be their guardian and care for them if something is to happen to you or your spouse. If guardianship has not been determined, typically a local judge will make that decision for you.  Depending on state law, and the child’s age, the judge may consider the child’s wishes, but isn’t always required to do so.  Also, without a properly drafted estate plan, with few exceptions, your assets will pass to your children immediately when they turn 18.  At 18, many teenagers haven’t fully matured, and distributing a large sum of money to them can be detrimental, especially if life insurance and significant retirement assets are involved.

Okay, but what about my ‘blended’ family? 

If you or your spouse have children from a previous relationship, you need an estate plan regardless of whether your children are minors or adults. Without a proper estate plan in place, your spouse, children and stepchildren may disagree on the distribution of your estate.  Often this creates conflict and unintended consequences.  You will need an experienced estate planning attorney to assist you in building your estate plan to accomplish the goals of your family.

How would my life partner be treated if we never got legally married? 

If your wishes are that your significant other inherit from you or could make medical decisions for you if you become incapacitated, you need an estate plan. On the other hand, if you specifically do not want your significant other to inherit from you or to act as your spouse, you also need an estate plan in place. Your significant other may claim that you had a common law marriage, therefore entitling them to inherit from you, which could be contrary to your intentions.

Our experienced attorneys at Evans & Davis can assist you in setting up a comprehensive estate plan to protect you, your loved ones, and your assets.