Don’t be fooled into thinking that you don’t need estate planning just because you’re not a millionaire!
- If you wish to choose who will benefit from your estate upon your death rather than defaulting to the government’s plan to distribute your assets, a good estate plan includes a Last Will and Testament.
- If you are making gifts during your lifetime to some of your beneficiaries or you are making gifts to all of them in unequal amounts, a good estate plan contains equalization provisions if you would like your beneficiaries to be treated the same upon your death.
- If you do not want your family to have to file a court proceeding to become your guardian.
- If you become incapacitated and you do not want your family potentially fighting in court over who should be your guardian, a good estate plan will address appointing agents you choose to make medical and financial decisions for you if you are no longer able to do so yourself.
- If you are concerned about losing your assets to the costs of a nursing home or other long-term care in the future, a good estate plan implements a plan (e.g., long-term care insurance or Medicaid planning) to protect your assets from the substantial risk that such expensive care may become necessary.
- If you have minor children, a good estate plan appoints standby and permanent guardians for your children, makes sure your life insurance is properly owned (i.e., not owned by the insured) to avoid being taxed in your estate, and makes sure your children do not have control of the money until they are mature enough to properly handle it.
- If you own a business, a good estate plan includes a plan for the management of your business and a succession plan for when you are no longer involved in the business.
- If you are a doctor, lawyer or other professional, a good estate plan protects your personal assets from professional liability claims.
- If you own real property in more than one state, a good estate plan provides that your estate will not have to go through multiple court proceedings in different jurisdictions.
- If you have beneficiaries who are spendthrifts, special needs persons, substance abusers, or may become unmotivated upon receiving an inheritance from you, a good estate plan makes sure their inheritances are in the form of a carefully crafted trust rather than an outright gift.
- If you have beneficiaries who already have substantial assets, a good estate plan allows them to have access to their inheritance while not causing their own estates to potentially become subject to increased estate taxes due to the inheritance received from you.
- If you are concerned that your beneficiaries may divorce sometime after they receive assets from your estate, a good estate plan includes planning so their inheritance are not subject to divorce claims and will stay within your blood line.
As you can see, there are many aspects of estate planning which have nothing to do with taxes. The above are examples, not an exhaustive list, of some of the very important, non-tax reasons why estate planning is necessary. [highlight]Again, don’t be fooled into thinking that you don’t need estate planning just because you’re not a millionaire![/highlight]