Who Needs an Estate Plan?
We all do. An estate plan is a set of legal documents which directs the disposition of your assets upon your death. The key function of a properly designed estate plan is to set forth what you want to happen to your assets after your death. About half the people living in the United States today do not have any estate plan. Without a properly formed estate plan, your assets will have to go through the Probate Court, a court supervised process which values your estate, settles any outstanding debts, and eventually transfers your assets to your legal heirs. This court supervised probate process can take anywhere from six months to two years, assuming there are no complications. During that time, your loved ones will not have access to the funds at a time in which they may need them the most.
In addition, if you have any minor children, an estate plan can allow you to specify who will care for them if you are unable to do so. Without specifying your preference in an estate plan the Court will need to get involved, causing significant delays and expense.
Another major benefit of having an estate plan is retaining privacy. The court supervised probate process becomes part of the public record. Anyone can access public records from the Probate Court, including information about your assets. With unrestrained access to these public records relatives and creditors can seek to have debts paid from your assets.
In addition to planning for your assets upon your death, a properly formed estate plan can also set forth your wishes in the event that an unfortunate accident occurred and you are no longer able to care for yourself or your family.
Most people believe that forming an estate plan will be too expensive. However, the cost of an estate plan can be significantly less than a probate. The cost of a probate proceeding for a family that owns a home in the Silicon Valley can easily exceed $10,000. It is very possible that an estate plan can be completed by an experienced estate planning attorney for a third of the cost. Planning for your future is one of the most cost effective decisions you could make for your family.
Hiring a skilled estate planning attorney can ensure that your estate plan is complete and that all of your assets and beneficiary designations are properly titled. A comprehensive estate plan can ensure that your heirs will receive your assets without delay and frustration. While an estate plan is a relatively straight forward, there are many pitfalls and requirements that need to be met to ensure that it is properly formed. You should seek the advice of a professional to ensure that it is done correctly.