When you think about your future, what comes to mind? You probably think about places you’d like to visit, friends and family you want to see, and goals you’d like to accomplish. You probably don’t think about what will happen after you’re gone. But you’re not alone. An estimated 56% of Americans do not have an estate plan in place. That means 56% of Americans have not created a plan for what happens at their death.
Lack of planning can create hardship, financial or otherwise, that can be diminished by advanced planning. This is why every third week in October, we celebrate National Estate Planning Awareness Week. On September 27, 2008, House Resolution 1499 was adopted to help consumers understand estate planning and its need, along with how best to create a qualified team of professionals to assist in the planning process.
Estate planning encompasses the growth, conservation, and transfer of an individual’s wealth through the creation and maintenance of an “estate plan.” The purpose of estate planning is to develop a strategy that will maintain the financial security of individuals through their lifetime and ensure the intended transfer of their property and assets at death, while taking into consideration the unique circumstances of the family and the potential costs of different methods.
We all have reasons and excuses for avoiding estate planning. We procrastinate and avoid doing what we should. However, here are five reasons to avoid procrastinating and get planning now:
1. Reduce estate tax and income tax
Proper estate planning can reduce estate and income taxes for both you and your family. Depending on the size of your estate, proper planning could cut your taxes by half or more.
2. Name guardians for minor children
Clearly, the future of your children is extremely important. In your absence, perhaps nothing is more important than who will watch over them. You can only nominate guardians for your minor children in a properly drawn Will.
3. Choose the timing and circumstances of distributions
Deciding who should receive your assets is the easy part. Deciding how and when they should receive the assets is much more important and more challenging. Usually, leaving assets outright to your beneficiaries is not the best way. By holding the assets in trust, you can protect those assets from your beneficiaries’ creditors and future ex-spouses. Also, you can mete out the assets over time so that your beneficiaries can get maximum use of the assets, without the opportunity to squander the assets.
4. Make provisions for heirs with special needs
Children and other loved ones with special needs require extra attention during life. Estate planning for them is no different. What might work for someone without special needs might not work for someone with those needs. By planning effectively, you can help make sure your assets go for the use of the special needs beneficiary yet do not disqualify them from receiving government assistance such as Medicaid.
5. Choose who will make decisions for you if you are disabled
People often think that estate planning only includes planning for what happens at your death. However, a major aspect of estate planning is addressing what is to happen in the event of your incapacity. Who will make financial decisions for you? Who will make health care decisions for you?
The reasons for doing estate planning are as numerous and as unique as we are as individuals. However, we all have one thing in common: we want to make sure that we and our families are taken care of in times of need. Planning is important to achieve these goals. A qualified estate planning attorney can help you celebrate National Estate Planning Awareness Week and come up with a plan that achieves your goals, both personal and financial.
The information provided is not intended to be legal advice and does not constitute any attorney/client relationship. You should consult with an attorney for individual advice regarding your own situation.
Ms. Melancon is an attorney with Legacy Estate & Elder Law of Louisiana, LLC with offices in Baton Rouge and Lake Charles, LA. The primary focus of her practice is estate planning, probate, special needs planning, and elder law. For more information or to attend an upcoming estate planning seminar, call her office at (225) 744-0027