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Do I Need Estate Planning?


By: Lauren Jones


This is a question we get a lot. We often hear several reasons why someone thinks they don’t need estate planning: “I’m too young.” “I don’t have a house.” “I don’t have children.” “Estate Planning is expensive.” 


Let’s help determine if you need estate planning and what type of estate planning you might need.


Are you over 18 years old?

-         If you answered yes, then there is some form of estate planning to consider. 


If you just turned 18, you likely have very little assets meaning a Revocable Living Trust would not be the answer for you. However, anyone over 18 is an adult and should ask themselves who will take care of your financial and medical decisions if you are incapacitated? If you answered my parents, my spouse, or my children, that would be true if you prepared the necessary legal documents giving them the power to make those decisions. 


If you think incapacity is not a concern because you are young and healthy, temporary incapacity can also look like surgery, car accidents, medically induced coma, or being on a ventilator. Incapacity can happen to anyone at any time.


Incapacity documents often include a Power of Attorney, Health Care Directive, HIPAA Authorization, and Living Will.


Do you have children?

-         If you answered yes, then you likely want your children to receive your assets quickly and efficiently, which requires estate planning.


If you have underage children, you are going to want a Revocable Living Trust to hold and transfer your assets to your children upon your death in a way that ensures that they receive their inheritance at a time or upon conditions that you decide.


If you have adult age children, you may still want to hold money in trust until they reach a certain age or accomplishment. You may also want to distribute each child’s share differently. There may be concerns where you need to protect your children from themselves or their creditors. These goals can be accomplished through a Revocable Living Trust.


Do you own a home?

-         If you answered yes, then you most likely want a Revocable Living Trust. 


A common misconception is that a Will is all the estate planning that you need. However, you cannot avoid probate with a Will alone. A Will also does not assist you during incapacity, it only takes effect upon death. Owning a home will require you to go through probate. However, one of the best ways to avoid probate is putting your home in a Revocable Living Trust.  


Do you want to avoid probate?

-         YES!


The type of estate planning you need will be determined by the amount of assets you have and your goals. One of the best ways to avoid probate is with a Revocable Living Trust.


Why should someone consider estate planning now versus letting it all transfer in probate? The two big reasons are time and money. Probate takes an average of at least 1 year to complete, and attorneys’ fees are a percentage of your gross assets. A $400,000 house alone will cost $11,000 in attorney’s fees, and another $11,000 in administrator fees.  That does not include the required Court filings.


If answering these questions has made you think you should talk to someone about your estate planning needs, give us a call and we will schedule you for a free estate planning consultation.   


   

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