If you have children under age 18, and you don’t have a will, you are choosing to put them in difficult circumstances in the event of your death. According to a Caring.com study conducted in 2017, only 36% of Americans with children under age 18 have a will. Only 42% of all Americans have a will. This leaves children unprotected, and families exposed to all kinds of estate disasters.
USA Today’s recent article, “Estate planning: 6 steps to ensure your family is financially ready for when you die,” explains that if you die without a will, state laws will decide what happens to your property or who should be legally responsible for minor children. That might be OK in some circumstances, but in others, a grandchild with special needs might not receive the resources you want him to have, or an estranged family member might get your house.
For some reason, people believe that if they don't do anything, things will “work out.” They often do not. Here is what you should consider:
Create a will. This document states who should get your money and possessions, as well as who would become a guardian to your minor children, if both parents die.
A living will and powers of attorney. This legal document states what medical procedures you want or don’t want, if you’re incapacitated and can’t speak for yourself, such as whether to continue life-sustaining treatment. Similarly, powers of attorney let you appoint someone you trust to make legal, financial and health care decisions for you, if you are unable.
Trust. This is a legal entity that holds title to any property you want to leave to your beneficiaries. With a trust, your family won’t have to go through probate and you can avoid having your affairs made public. Trusts also let you set up instructions for how and when property is distributed. You’ll need to name a trustee who will manage the trust. Make sure you let people know, when you’ve designated them as a trustee. Name a secondary trustee, in case the primary trustee cannot or will not serve.
Beneficiaries. If you have investment accounts and retirement plans like a 401(k), make certain that the individual you’ve listed as the beneficiary is the person you want to receive those funds. Remember to appoint a contingency or secondary beneficiary, just in case. Under the right circumstances, your trust can be named as the beneficiary of your retirement accounts to provide asset protection to the retirement account principal, but this should only be done under the advice of an experienced estate planning attorney who can help you avoid problematic tax consequences when a trust is not drafted with the correct language.
Get to know an experienced, local estate planning attorney. Trying to use an inexpensive online will service, doesn’t work for every situation. A local attorney is familiar with the law in your state, which governs estate planning, and will get to know you and your family. They’ll be able to give you the help you need, without any surprises. An invalid will created on the cheap, ends up costing far more than a well-designed estate plan.
An estate plan protects you from incapacity when you are living and protects your family when you have passed. Make an appointment today with the Soto Law Firm, if you don’t have an estate plan yet. It’s never too early.
Reference: USA Today (April 1, 2019) “Estate planning: 6 steps to ensure your family is financially ready for when you die”