When considering the need for estate planning, many people think, "It's been on my list of things to do for years... I'll get around to it sooner or later." A recent report showed that more than 70 percent of people die without an up-to-date will! The only guarantees in life are death and taxes, and there are many reasons you need to have an estate plan in place. We never know when the most unfortunate situations can happen, and proper estate planning will ensure your loved ones will be taken care of.
An estate plan is the most common and useful way to prepare yourself and your family for what happens in the worse two circumstances: death and disability. An appropriate estate plan will give you an opportunity to plan for unexpected incapacity, whether the result of physical or mental disability, as well as to plan for taking care of your loved ones upon death. Regardless of how few assets you may have, planning for your family's future is a necessity for everyone.
The primary purpose of a will is to distribute your property to the people you have chosen to receive that property after your death. The terms of the will should include a statement of what goes to who, as well as a guardianship provision if you have children who may be minors at the time of your death. But a will, by itself, will likely end up in probate for at least 9 months (and more often a full year or more), and could result in significantly higher administrative costs. A will should be a critical component of an estate plan, but there is more to consider when planning.
Most people establish a trust in an effort to reduce estate taxes and avoid probate. A trust is essentially a fiduciary agreement between the trustee and the creator of the trust. The trust document authorizes the trustee to hold and manage the trust assets for the benefit of the named beneficiaries. Through a trust, any inheritance can be protected from divorce, creditors, taxes, and other unpleasant and unintended beneficiaries.
A very common misunderstanding is that estate planning is only for the wealthy, but that is false. We all have something we want to leave behind to someone who is important to us. Even the smallest estate needs a plan in order to protect not only the assets but also the beneficiaries who will ultimately receive them.
The basic reason most people create an estate plan is to be sure their assets don't end up with someone they didn't intend to have them. However, if you don't make these important decisions ahead of time, the court will ultimately do it for you. On the other hand, if the court is left to make those decisions, it could take years to finish and may result in family disputes.
Parents never want to consider the possibility of dying while their children are still too young to take care of themselves, but it can happen. That's why you need to make arrangements ahead of time. As alluded to above, the will is a very important part of every estate plan, and it can help you prepare for your children's future care. Every parent would prefer to have the chance to make all decisions about the future and safety of their children. In order to be able to do that, however, you need estate planning. You Reno estate planning attorney can help you include provisions for your child's care, choose a guardian for them in the event both parents die, and any other provisions you feel you need. The alternative is that the court will make these decisions for you amidst families fighting over what they think your wishes would have been.
If you want to guarantee that your heirs will be free from unnecessary estate taxes, then you must have an estate plan. An important part of estate planning needs to provide a way to transfer your assets to your heirs with as little tax burden as possible. Luckily, it doesn't take major planning to reduce or even eliminate estate taxes.
Deciding how to distribute your estate fairly among your loved ones can be a challenge. Unless you provide very specific provisions in your estate plan, your executor will be left to decide how everything should be divided. Avoiding family disputes regarding property and keepsakes can be accomplished through estate planning. Ultimately, you don't want your family fighting over your personal possession, after your death. An estate plan can help you avoid most of the challenges that come with distributing an estate.
If you have questions regarding wills, trusts, and any other estate planning matters, please contact the experienced attorneys at Anderson, Dorn & Rader, Ltd. for a consultation. You can contact us either online or by calling us at (775) 823-9455. We are here to help!