The short answer is that everyone age 18 and older needs an estate plan. It does not matter whether they are old or young, have built up considerable wealth or are just entering adulthood—everyone needs a written plan to control what happens to the things they own and to protect themselves and those they love.
The Key Takeaways
- Every adult, regardless of their age or the amount of wealth they have accumulated, needs both a lifetime incapacity plan (a plan for if they are alive but are unable to manage their own affairs) and an after-death estate plan.
- Planning for incapacity keeps control over who will make decisions for the incapacitated if they are unable to and allows trusted loved ones to care for them without court interference—and without the potential loss of control over important decisions or expenditures for their benefit and the added expense of a guardianship or conservatorship proceeding.
- Every adult needs up-to-date healthcare directives to communicate their end-of-life wishes if they are unable to communicate them themselves.
- It is important to leave written instructions to ensure that control is maintained over who is in charge of when and how one’s assets will be distributed.
- Every adult needs the counseling and assistance of an experienced estate planning attorney to ensure that they are implementing a legally enforceable and comprehensive plan for the future.
What Is an Estate Plan?
Planning for Death
An estate consists of everything someone owns—including a car, home, bank accounts, investments, life insurance, furniture, and personal belongings—minus debts like a mortgage or car loan. No matter the size of an estate, these things cannot be taken with someone when they die, and it is likely that they would want certain people to receive certain things.
To ensure that your clients wishes are carried out, written instructions need to be provided stating who will receive their assets and belongings, what they want their loved ones to receive, and when they are to receive it—that is the essence of an estate plan. If your client has young children, someone also needs to be named to raise them in your client’s place and manage their inheritance in the event that both parents are unable to do so.
Lifetime Incapacity Planning
A properly prepared estate plan for your client will also contain instructions regarding their care (and the management of their assets) if they become unable to manage their affairs (sometimes referred to as being incapacitated) even for a short time due to illness or injury. Without the proper tools in place, their family will have to ask the court to appoint someone to manage the finances and medical care and for permission to use the assets to provide care for them. When relying on the court to make these determinations, the process is outside the control of the your client and their loved ones, it takes time, and can incur significant legal fees and costs, making an already stressful situation even more difficult for the loved ones. Depending on the family dynamic, this process can also be contentious if the family disagrees about who should manage the affairs or what the proper course of action for care should be. Not only does this infighting threaten family harmony, it may also become a matter of public record, as most documents related to these types of proceedings will be available to anyone who requests them and pays a fee.
It might be a surprise, but having a plan in place can often be very costly with the court costs and legal fees associated with the court process known as probate. Here is an example:
Sam and Meg had two young children together. Sam died in a car accident. Because he had no estate plan, the laws in his state divided his estate into thirds: one-third to Meg and one-third to each of their children. His estate included his one-half interest in their home, an inheritance he received from his grandfather (he was using this money to help support the family while looking for a higher-paying job), and a life insurance policy (but he failed to complete the beneficiary designation). Meg, a stay-at-home mom, was forced to go back to work after Sam’s death. The court set up conservatorships (in some states called a guardianship or guardianship of the estate) for each child to manage their inheritances, which required ongoing court costs, including accounting, guardianship, and attorney’s fees. When the children turned 18, they each received what was left of their inheritances in one lump sum, and there was not enough to cover their first year of college tuition.
What Your Client Needs to Know
An estate plan should not be created without the assistance of a professional. An experienced estate planning attorney who is familiar with the laws in your client’s state of residence and who can guide them in making difficult decisions such as who will raise their children (if applicable) and manage their affairs if they cannot. An experienced attorney will also know how to craft the appropriate estate planning tools so that their wishes are carried out.
You Can Count On Us – We Are Here to Provide Professional and Dedicated Help
If your client is ready to take control of their life and the legacy they wish to leave behind for their loved ones, have them call our office at 708.448.5169 to schedule an estate planning consultation appointment. We make tough topics manageable to discuss. We can also craft a plan that addresses what your client values most and protects them and those they care about.
