Estate Plan: 3 Reasons Why You Need One

Who needs an estate plan? Our answer: everyone! 

Contrary to popular belief, an estate plan is not limited to retirees or wealthy folks. It is an essential tool that is beneficial to everyone.

Here are 3 Reasons Why You Need an Estate Plan:

1. Save Time and Money

If you pass away without a will, family members would likely have to hire an attorney so that your estate can be assessed and administered through the probate court. 

Probate court is costly for two reasons: attorney fees and estate taxes. In many cases, an attorney would have to be hired in order to begin the probate process. In addition, the transfer of assets will result in estate taxes that must be paid during the administration of the estate. 

In addition, probate could also be lengthy and complex. It could take years before a surviving spouse or children can inherit from the estate. Even more so if you have family members that are in conflict. 

You can avoid the lengthy time, complexity, and expense of probate by having an estate plan that spells out who you want to inherit your property, and avoiding some estate taxes by having your assets put into a trust.

2. Protect your Children

Parents: If you pass away without a spouse to survive you, have you considered who would get custody of your minor children?

If you pass away with no will in place, the court will be responsible for appointing a guardian. In most cases, this will be a family member, such as a grandparent. However, if your minor child has no surviving family members, and there is no third party that steps forward to assume the role as guardian, your child could become a ward of the state and enter the foster care system. 

You can avoid this scenario by having an estate plan. With an estate plan, you can choose who to appoint as guardian of your children should something happen to you and/or your spouse. You can even assign a secondary person in the case your first election is unable to serve as guardian. 

An estate plan gives you a sense of security knowing that you have chosen a person that you feel will be best to step in to care for your children. 

3. Protect Yourself

An estate plan not only plans for death, but also plans for unexpected incapacity or illness during your lifetime. 

A thorough estate plan will include two documents that assign a financial power of attorney, and healthcare power of attorney. 

A financial power of attorney is a person appointed with the responsibility of managing your financial affairs. This power of attorney can become effective immediately upon assignment, or only effective if you become unable (or unwilling) to manage your own financial affairs. Financial affairs can include many transactions, such as managing bank accounts; filing tax returns; applying for government benefits; or buying and selling property.

A healthcare power of attorney is a person appointed to communicate with doctors, and with the authorization to make medical decisions on your behalf during any period in which you are incapacitated or unable to make decisions regarding your health/care.

Through an estate plan, not only can you appoint one or more people to serve as your financial and/or healthcare powers of attorneys, but also select what powers they can exercise while serving in their fiduciary capacity. Making these decisions ahead of time allows you to pick someone that you trust, and that will handle your affairs according to your desires. 

This only covers the surface!

Apart from the three reasons listed above, there are many other benefits to having an estate plan. 

If you are curious as to how you can benefit from an estate plan, contact our office for a free consultation! 

We offer our estate planning services to the Inland Empire area, which includes San Bernardino County, Riverside County, and parts of Los Angeles County. 

Our office is located in Rancho Cucamonga, and we accept both in-person and virtual appointments.