Poor estate planning has dire consequences.
You think you do not need an estate plan.
Perhaps you believe estate planning can wait.
You are young.
You have time.
According to a recent Chron.com article titled “Will you plan now or pay later?,” this is faulty reasoning.
No one can predict their own future.
You do not know when tragedy may strike.
Poor estate planning will cost – a lot – if you become incapacitated or die.
How do you avoid this?
Start by creating a last will and testament.
You can nominate an executor for your estate as well as a successor executor (if the first executor is unable or unwilling to serve).
With a last will, you can also direct who inherits what.
If you die intestate, your assets will be passed according to the law of the state.
In some cases, a “simple will” constitutes poor estate planning, especially when the inheritance is distributed “outright” to the beneficiary.
You could end up fueling an addiction with a your hard earned cash or leaving your assets vulnerable to loss if your beneficiary goes through a divorce.
More complex family dynamics like these may require the greater control found in a trust.
Although the current federal $11.58 million tax exemption excludes many from estate taxes, some states have their own estate taxes.
Working with an experienced estate planning attorney can help you avoid negative tax consequences.
Poor estate planning can be especially problematic with incapacity from an accident or illness.
To be prepared, you should have a general durable power of attorney (for financial decisions) and an advance health care directive.
With these in place, you can know your affairs will be handled by someone you can trust.
Note: a last will is subject to the probate process and has no power or authority over assets passing outside of probate.
Alternatively, if you want to avoid probate, ask your estate planning attorney about whether a “revocable living trust-based” estate plan is appropriate for your unique circumstances.
Take action now.
If you wait, you (and your loved ones) could suffer some of the harsh consequences of poor estate planning.
Reference: Chron.com (January 16, 2020) “Will you plan now or pay later?”