Top 5 Reasons to Create an Estate Plan.
Most people have a vague understanding that they should do some estate planning, but they’re not sure exactly why they should. As an estate planning attorney, I love helping my clients understand the fundamentals of estate planning, beginning with - "why do you need an estate plan in the first place?" It's one of the most common questions I hear. And while there are endless reasons to create an estate plan, below are my top five:
1. Allow Your Loved Ones to Avoid the Probate Process
Avoiding probate is by far my clients' most common goal in creating their estate plans. Similar to the notion that they should have an estate plan, many people also know that they would like to avoid "probate," even if they don't know exactly what probate is. Generally, "probate" is the court proceeding that takes place after someone dies to determine who will receive the deceased's property and appoint someone to transfer the property. The desire to avoid probate likely stems from horror stories about the process reported in the news or heard from friends and neighbors. I personally don’t feel that probate deserves its bogeyman status, but there's certainly risk that it could cause unnecessary expense and delay for your loved ones after you're gone. Since a probate proceeding can be easily avoided with a little planning, many people would prefer to avoid probate altogether and not take the risk.
Aside from the cost and delay, another reason to avoid probate is that the proceedings are matters of public record. Information filed with the court in a probate proceeding, including the provisions of your will, along with lists of what property and belongings you leave to your loved ones, is freely available to anyone looking for the information. With the growing availability of information via the internet, privacy is also now a major consideration for most people in wanting to avoid probate through their estate plan.
2. Protect Both Minor and Adult Beneficiaries
Protecting your beneficiaries can mean two things: (1) nominating a Guardian and Conservator for minor children, or (2) protecting adult beneficiaries' inheritance from creditors, ex-spouses, or from their own bad decisions.
If you have minor children and something happens to you so that you can no longer care for them, Michigan law requires that a guardian be appointed to physically care for the children, and also that a conservator be appointed to manage their property and inheritance until they turn 18 years old. Questions often arise about who would be best to serve in those roles, and can even result in heartbreaking family infighting. An estate plan can prevent any risk of family conflict and costly legal expense by allowing you to state clearly who you nominate to act as guardian and as conservator (or trustee) for your minor children.
3. Avoid a Mess - If You Create a Clear Plan, Then There's Nothing to Fight About.
Clients often tell me they decided to put a plan together after they personally experienced, or heard from someone else who had experienced, messy and expensive legal proceedings resulting from a loved one’s unfortunate failure to make a plan. The lack of an estate plan, or the existence of an unclear or poorly drafted plan, can often lay the groundwork for family strife and infighting. The comparatively easy process of making an estate plan now can prevent the risk of disaster later.
It’s also worth mentioning that many deceased parents, were you to have asked them during their lives, would never have guessed that their children or family members would engage in such costly fighting. If you share that belief, you might be right, and I hope that you are. But why risk it? I often explain to clients that I’ve never heard anyone say, in any context, “I wish I wouldn’t have done all that planning.” Planning, even if the plan changes down the road (which they usually do), is never a waste. But failing to plan can be a great waste - of relationships, money, time, and more. As long as there's a clear plan, even if someone doesn't like the plan, many problems can be headed off. Feel free to think of it as your last "because I said so!" to your kids.
4. Plan for Incapacity - An Estate Plan can Provide for Your Care and Well-Being, and also can Provide Your Loved Ones with the Guidance and Reassurance They Will Surely Appreciate.
Most people think of estate planning as setting up a plan for after they die, but an equally important benefit of estate planning is providing instruction and authorization for incapacity. Without proper planning, in the event you become incapacitated for any reason, nobody (not even your spouse) will be able to pay your bills, access your accounts, or make decisions or sign documents on your behalf. If you become incapacitated, a cumbersome and expensive court proceeding will be required to grant someone the legal capacity to act for you. Alternatively, in your estate plan, you can easily name and authorize someone of your choosing to act for you in the event you can no longer act on your own.
5. Peace of Mind: Knowing That Your Wishes are Well Documented Can Lift a Weight Off Your Shoulders, So You can Get Back to Living Your Life.
I hear from my clients all the time how happy they are to have finally created an estate plan. Usually it's something they’ve been meaning to do for a long time, and it feels very good to have finally done it. A weight is lifted. And while an estate plan is certainly a wonderful gift for your loved ones, the peace of mind it provides to you is also a wonderful gift to yourself.
If you've been thinking about getting your estate plan done, we welcome the opportunity to talk with you. We offer completely free, no-obligation consultations to anyone interested. All you have to do is call us at (616) 920-1932 or just submit the information below. We look forward to speaking with you.