Did you know that you already have an estate plan? If you are U.S. citizen, then your state has already created an estate plan that will go into action at the time of your death. The catch is this: the plan is not customized to your particular desires and preferences. It is your state probate plan, and all your property and finances will be distributed according to this graph. If you are married, all property will go straight to your spouse after taxes and funeral expenses are removed. If you die without a spouse, then the money will probably be distributed evenly to your children.
If you become disabled before your death, your state probably has a law saying that only a court-appointed person can sign any papers or business orders for you. The court, not your family, will have control of how your businesses are run and assets are used to care for you. This means that your loved ones will not be involved in serious decisions about your estate. In addition, the process is expensive and time consuming, and all of your information will be public. Even if you recover from your illness, it can be difficult to gain control of your assets once a court-appointed individual has taken over.
At your death, your assets will be distributed according to the probate laws in your state if you die intestate. If you have minor children the court will control their inheritance until they come of age. If both you and your spouse die in an accident of some kind and leave behind minor children, the courts will appoint a stranger to care for your children unless you make provision and appoint a godparent in a legal document.
The courts do not know your personal situation, so if you have a close friend or a beloved nephew that you will to inherit your fortune, then an intestate estate plan won't include them. That is why it is important that all individuals draw up a last will and testament and prepare for the future of their finances. It is highly recommended that you hire a probate professional or an estate planning lawyer to help you with your end-of-life preparations so you can forego your state's pre-determined plan.
With the help of an attorney and a little planning, you can control how your property is given to your loved ones and the organizations that you are passionate about. You can also determine who receives what, and what each person will receive. You can also determine when a person should receive your money. With careful planning you can also make sure that you are paying the least amount in taxes, legal fees and court costs at the end of your life. Naturally, your state will not jump through hoops to ensure that you avoid taxes, and the state estate plan will probably involve putting large amounts of money into this expense.
It is never too early to prepare an estate plan. Whether you are 21 or 92, it is important to be prepared for the future. In an estate plan, you can also include instructions for passing off any values in addition to your property. This means that you can write about the importance of your religion, education, or the principles of hard work in hopes that your descendants will heed your advice. You can also include instructions for your care if you become incapacitated prior to your death.
In addition to this, in an estate plan you can name a guardian and inheritance manager for any minor children you may leave behind in your passing, and can provide for family members with special needs without disrupting the government benefits that they are receiving. You can also provide for loved ones who might be irresponsible with money or may need future protection in the event of divorce or due to indebtedness.
Estate plans can also provide for a preferred transfer for your business in the case of disability or death, and can help to include life insurance for your family at the time of your death and disability income insurance to help pay for your care in the event of extended illness or injury. A lot of people don't plan for their death, and therefore end up having the state plan enforced to provide for their families. For some families, this can be devastating. Hire a local probate professional or estate planning lawyer to help you today!