Top 5 Reasons to Get an Estate Plan
Updated: Nov 24, 2020
Estate plan is simply a set of legal documents to help you plan for life and death. A properly written estate plan can bring peace of mind. People commonly think that only the really wealthy need an estate. Here are the top 5 reasons why everyone needs an estate plan.
1. Prepare for incapacity during life
An estate plan usually includes a Durable Power of Attorney and Healthcare Directive. These documents allow someone of your choice to make decisions for you while you are still alive but incapacitated.
2. Designating a guardian for minor children
Guardianship is usually a major concern for parents of young children. If both parents die without a will, the court will appoint a guardian for the children. Parents can avoid this by designating guardians and alternate guardians for their children in their will.
3. Avoiding Probate
If someone dies with or without a will, their estate will need to be probated. A trust, sometimes called a “will substitute,” allows property to pass without probate.
4. Managing and planning for wealth
Even if you do not have a large estate, many people want to control the way their property passes to the next generation. A will or trust can define when, how, and to whom your money passes.
5. Avoiding Estate Taxes:
Most people do not have to worry about an estate tax unless your estate is over $11.4 million or 24 million for a couple. If you do have an estate over the exemption, then you should talk to a lawyer to maximize the amount of money your family can receive after your death.