This is the first post in a series that will explain some of the basics of estate planning and basic estate planning documents. Many people put off estate planning because they associate it with their own death or they think it is too expensive, but estate planning isn’t just about the distribution of your assets after you are gone. It also isn’t just for the wealthy. In fact, it may be more important for the middle class because there won’t be enough money to correct a failure to plan after you are gone. It is cheaper to do it right the first time. Proper estate planning also takes into account how you will be taken care of if you become disabled. It also considers how to protect your assets for your own use and your hopes, dreams, and desires for your loved ones whether family, friends, or charities. Your estate plan will be built on a firm foundation by first considering your needs, then the needs of your family, ways to protect your estate, ways to grow your estate, and, finally, ways to minimize estate taxes, if applicable. Less than two percent (2%) of estates are subject to estate taxes.
Once upon a time, I might have said that you didn’t need an estate plan unless you had assets, property, or children. However, I have run into some situations that have convinced me that just about everybody needs an estate plan. It is possible for someone who never had any assets to have a large estate at death. How does this happen? A young father or mother could be killed in an accident with a well insured Coca-cola truck whose driver ran a stop light. Suddenly the not wealthy young father or mother has a substantial claim and a large estate. If the decedent was happily married to the other parent of the children, there may not be any problems. However, I have seen many situations like this where the couple was estranged. In the absence of a will, this often causes problems. On at least one occasion, I encountered a family where four of the five surviving “adult” children were mentally handicapped. The fifth was not much better. Their mother left a mobile home on some land and no will. This caused considerable problems. \
The Terry Schiavo tragedy is another example. If she and her husband had done any estate planning, chances are that they would have received Living Wills. There then would have been no doubt as to Ms. Schiavo’s wishes one way or the other. Many years of expensive litigation might have been avoided or shortened.. So now I think most people could benefit from estate planning.