By Ryan V. McNeill, Brinkley Walser, PLLC
Well, another new year has rolled in, and many of you still have not created an initial estate plan or updated your existing plan. It can seem like a daunting task, and discussing end-of-life issues is not something many of us are comfortable doing. I would like to explain why it is so important to get your estate plans in place, and I hope you will add this task to your list of resolutions for the year.
Top 5 Reasons for Estate Planning
Reason #1: Protecting Your Children or Dependents
The most important reason to sit down and talk about estate planning is to protect your minor children and dependents. It does not matter how much money you have in the bank, or whether you are still young and don’t have many assets. If you have children or others who depend on you, it is important to have a plan. What would happen to your children if you were killed in a car accident? What if you were severely disabled and unable to communicate your wishes? Even if you are single and have minimal assets, who would pay your funeral expenses and settle your legal affairs should you die or become disabled unexpectedly?
Reason #2: Age Isn’t the Determining Factor
We often hear people say they don’t have estate plans in place because they are young and still “have time.” Injury and illness can happen to anyone at any time. Age is not always the primary factor. It’s a good idea to begin the estate planning process in your twenties and continue revising and updating your plan as your circumstances change and you accumulate assets. We recommend an estate review every 2-3 years or sooner with a life-changing event (marriage, children, illness, disability, etc.).
Reason #3: The Government’s “Share” of Your Estate Can Vary
If you die without a will (“intestate”), probate laws give the court jurisdiction over how your estate is handled. If you have minor children, a judicial official (typically the Clerk of Court) will determine who their guardian will be. The law – not you – will also decide how your estate is to be distributed. In addition, depending on the value of your assets, your estate may be subject to estate taxes, unnecessary costs of administration/probate, or subject to spend down if a beneficiary is the recipient of public benefits such as Medicaid or SSI. With proper planning, your assets can be protected from many of these costs, allowing the beneficiaries YOU designate to receive a higher percentage of your estate or preserving necessary benefits to which they might otherwise be entitled.
Reason #4: Ensuring Your Wishes Are Honored
Estate planning is not just about having a Last Will and Testament or a Trust written and kept up-to-date. It is also important to consider what happens if you become incapacitated through injury or illness. Having a living will, medical power of attorney, HIPAA authorizations for release of important medical information to decision-makers, and other appropriate legal documents on file can ensure your wishes are honored. It also helps to discuss the location and contents of these documents with your loved ones so everyone is on the same page. Your treating physician should also have copies of any medical directives.
Reason #5: Avoiding Family Squabbles
Unfortunately, the death of a loved one can often bring old family issues to the forefront, leaving loved ones mourning your death while fighting over your assets or who is to make decisions. It doesn’t matter that you don’t have a large estate, family members’ can be left feeling hurt or confused leading to squabbles over trinkets. Having a clear Last Will and Testament or trust instrument can help ensure your assets are divided as you intend and under the supervision of those whom you intend. If you intend to specifically omit a family member from your estate, there are ways to do this so they are less likely to dispute the Will and delay the probate process. Again, it helps to discuss the basic contents of your estate plan ahead of time so no one is blindsided.
About the Author
Ryan V. McNeill is an Attorney at Brinkley Walser, PLLC, in Lexington and Greensboro, NC. His practice areas include estate planning, elder law and business law. He can be reached at (336) 249-2101 or via e-mail. Brinkley Walser prides itself on providing new and cutting edge legal counsel built on a foundation of knowledge and integrity more than 125 years in the making. The firm has offices at 10 LSB Plaza in Lexington and in the First Citizens Building, 620 Green Valley Road, Suite 306, in Greensboro. Visit Brinkley Walser on the web at www.brinkleywalserstoner.com.