Did you know that Aretha Franklin, whose net worth is estimated at $80 million, died without a will? This is not unusual; she joins such celebrities as John Denver, Prince, Sonny Bono and Tupac Shakur, who have also passed away before taking care of their estate plans.
Most people don’t like to think about their own mortality, so they put off estate planning. They’re waiting until they’re older, they have more time or more money, or they plan a trip to Europe.
Not having appropriate estate planning documents is a mistake. The fact is that we don’t know when we’re going to die. Nor do we know when we might become incapacitated due to an accident or sudden illness.
If you die unexpectedly and your estate planning documents are out-of-date or nonexistent, settling your estate is likely to be much more complicated and expensive. More importantly, your property will be distributed in accordance with state law rather than your wishes.
By planning now, you can ensure that your assets go to those you want to have them. In fact, by creating a distribution plan, you can give some things to people while you’re still alive and able to see them enjoy those benefits, while arranging to have the remainder of your estate transferred on your death.
You can also make arrangements to have children receive your assets only after they reach a certain age and to protect disability benefits for beneficiaries with special needs. You can identify the people you’d like to handle your estate and to care for your children.
Finally, if your net worth is high enough that estate taxes are a concern, you can plan ahead to reduce or eliminate the tax burden.
Advance directives and durable powers of attorney are important to help ensure your wishes are met if you’re incapacitated.
An advance directive is used to describe your desires with respect to life support and the like, as well as to appoint someone to make healthcare decisions for you if you cannot do it on your own.
A durable power of attorney allows you to appoint someone to act for you in non-healthcare situations when you’re incapacitated. For instance, you can appoint someone to handle your banking and manage your investments.
Please feel free to contact us if you need help with estate planning.
