Many people believe that they do not need estate plans, but often they actually should do some estate planning now. Estate planning can help you distribute your assets according to your wishes, protect relatives, and give you peace of mind.
- Distributing Assets According to Your Wishes
Without an estate plan, you have no guarantee that your assets will go to the people of your choice. In fact, people who die without wills have their estates distributed by the order of intestate succession. As a result, spouse and children will inherit the entire estate. If there are no spouse or children, then the next closest relatives such as parents or grandchildren will inherit.
Many people want to leave at least a small inheritance to people other than their spouses and children – for example, a parent without an income. They may have other reasons for wanting to avoid intestate succession, such as an estranged or separated spouse. Making a will and thinking about other estate planning can help.
- Protecting Relatives
Second, making a will or a trust may protect your relatives in a few ways. For example, you can provide for a minor child in your will, or you can leave regular trust distributions to your unemployed parent. You also can protect your money from irresponsible spenders while still giving them financial support. If you choose to form a trust, you can set money aside during your lifetime to be used after you are gone. With a will, your relatives receive all of your assets left after your executor pays off creditors.
- Peace of Mind
Third, an estate plan can give you significant peace of mind. You can feel confident that your wishes are written down in legally recognized documents. By choosing a reliable executor, you know that someone will be taking care of the proper distributions after you are gone.
In addition, you can sign powers of attorney that allow trusted agents to make medical or financial decisions for you when you cannot. This can provide peace of mind that your personal needs will be met, beyond just settling up your estate.