What is an Estate Plan? (And why you need one)
By Katherine Crowell
April 9, 2020
With the COVID-19 pandemic creating unprecedented uncertainty in all our lives, many of us are focusing on the things we can control rather than the things we can’t. One of the things you can control is your estate plan. Everyone needs one, but what is it? How do you go about creating one?
What is an estate plan?
Your estate plan is a plan that you devise (with the assistance of your attorney) long before your death so that, when you die, your assets go to the people you choose, and in the manner you want. Generally speaking, your “estate” is all of the assets you own at your death, both in your sole name and as a co-owner with others. This can include property, money in a bank account, businesses and more.
What happens if you don’t have an estate plan?
If you don’t have an estate plan, your assets certainly will still be transferred to someone, but it may not be to the person or in the manner you would have wanted. If you don’t have a Will, state law decides who gets your property and who will be in charge of settling your estate. If you have young children and don’t have a Will that names guardians for them, a court will decide who will be their guardian without input from you.
For example, many married people want all of their assets to pass to their surviving spouse. However, without a Will, the law in many states provides that a portion of the assets will go directly to any children of the marriage.
Typically, estate planning also includes arrangements for managing your assets if you become physically or mentally incapable of handling matters on your own. Without such planning, expensive and time- consuming legal proceedings, such as guardianship, may be required.
Finally, your estate plan should include directions regarding your medical care, such as life support, in the event that you are unable to make your own decisions. If you don’t make your health care wishes known in advance, it may be much harder on family members during what is already a difficult time.
Next time we’ll discuss what you might want to include in your estate plan.
Excerpt from the book Estate Planning for the Savvy Client: What You Need to Know Before You Meet With Your Lawyer by Mary L. Barrow, Esq.
Copyright ©2020, 2017 by Mary L. Barrow
THIS EXCERPT IS A BRIEF SUMMARY FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE USED AS A SUBSTITUTE FOR THE ADVICE OF COMPETENT LEGAL COUNSEL FROM AN ATTORNEY ADMITTED OR AUTHORIZED TO PRACTICE LAW IN YOUR JURISDICTION. YOU SHOULD ALWAYS CONSULT YOUR ATTORNEY BEFORE IMPLEMENTING OR CHANGING ANY ESTATE PLANNING STRATEGY.