Estate planning is an all-encompassing process of organizing your assets, protecting your loved ones, and ensuring your wishes are fulfilled both during your lifetime and after you pass. It includes creating wills, trusts, powers of attorney, and healthcare directives to provide clarity and security for your family while minimizing legal complications and taxes.
Before considering estate planning, it’s important to know the facts to ensure your assets are protected, your wishes are honored, and your loved ones are cared for without unnecessary legal or financial burdens. This article will summarize 8 estate planning facts to give you more knowledge about this essential process. We’ll address common myths and share why estate planning should be paramount in preparing for the inevitable. Let’s get started!
8 Facts You Need to Know About Estate Planning:
1. It’s not only for the wealthy or older adults.
Everyone needs estate planning, no matter their age or income. A common misconception about estate planning is that it’s only for older adults or wealthy individuals. However, it’s essential to have a plan set in stone no matter how old you are and how much your assets are worth. If you have minor children, an estate plan ensures they’re taken care of once you’ve passed away. If you’re married, estate planning allows you to decide how joint assets will be distributed once you’ve passed. No matter your life circumstances, having an estate plan gives you peace of mind and ensures your wishes are granted if you’re no longer here.
Perhaps the most beneficial part of estate planning is that your estate and loved ones won’t go into the hands of the state once you’ve passed. If you prepare in advance, you get a complete say over how your assets and loved ones are handled upon your death.
2. It protects your children once you’re gone.
Another key fact about estate planning is that it protects the people who matter most to you—especially your young children. Without a plan in place, your minor children could be cared for by someone who you haven’t hand-picked and vetted. If you don’t leave a will naming someone to care for your children, the decision falls to the state court by appointing a legal guardian based on their knowledge. However, you know your children best, so you know who they need if you’re not there to care for them properly. Who do you trust the most to ensure your kids are raised how you would? With an estate plan in place, your kids will be cared for by a trusted guardian you’ve chosen, ensuring they are loved as much as you intended.
It’s particularly essential to consider estate planning for parents of kids with special needs. By planning now, you can secure your loved one’s future and ensure they receive the extra attention and care they need to thrive. An estate plan allows you to protect your child’s eligibility for government programs, which are essential for living and medical expenses. Furthermore, estate planning will enable you to create a customized plan to meet your child’s unique needs, including appointing a guardian and writing a letter of intent that outlines their care.
3. It ensures your estate and loved ones are cared for according to your wishes instead of the state’s.
It’s been mentioned before in this article, but it’s worth repeating—if you don’t create an estate plan now, the probate process will take over, and your assets, along with the well-being of your loved ones, could end up in the hands of the state. That means you don’t get any control over who inherits your property, how your wealth is distributed, who will care for your kids, and who gets your various assets. Instead, the state court will dictate how your assets are divided and who receives different parts of your estate. Unfortunately, the state doesn’t know your intentions, so they’ll do what they deem best.
But what if they hand your children over to someone you don’t trust to care for them adequately? What if they give parts of your estate to an irresponsible relative you had no relationship with? Several possibilities could happen, but this can all be prevented with an estate plan in place. Estate planning protects your peace of mind and ensures a lasting, positive legacy is left behind once you’ve passed.
4. Planning can ensure you appoint a trustworthy person to make end-of-life decisions.
A commonly overlooked fact about estate planning is that it’s not just for after you pass away—it also helps protect you later in life. During estate planning, you can appoint a Power of Attorney (POA) to make important decisions on your behalf if you cannot do so.
A healthcare POA is someone you choose to make health-related decisions for you once you’ve become incapacitated. These can include decisions such as whether you’d like to remain on life support, the types of medical treatments you receive, pain management preferences, and end-of-life care choices. Having a trusted person in this role ensures your wishes are honored when you cannot communicate them yourself. On the other hand, a financial POA makes decisions for you surrounding your business and economic affairs. This includes filing tax returns, signing checks, and managing investment accounts.
Having the ability to appoint a POA—or multiple POAs—is essential to ensuring that your medical, financial, and personal affairs are handled according to your wishes at the end of your life and in times of incapacity.
5. Estate plans can protect children from their own misinformed decisions or poor habits.
If you’re hesitant about letting your children have complete control over their inheritance once you’ve passed, estate planning can give you peace of mind. Establishing a trust is a crucial part of estate planning, allowing you to safeguard your children’s inheritance and appoint a trusted individual to manage how and when the funds are used. Suppose you’re worried about children losing their inheritance due to negligence, substance abuse issues, or irresponsible spending. In that case, estate planning can ensure a seamless transfer of wealth and assets to your kids.
6. It can decrease taxes on your estate after you’ve passed.
Losing a loved one is already an emotional challenge, and the added burden of estate taxes can make the process even more stressful for your family. Fortunately, there are estate planning strategies to minimize these taxes, such as setting up an irrevocable trust, which removes certain assets from your taxable estate, and gifting assets to beneficiaries while you’re still alive to take advantage of tax exemptions. Proper estate planning ensures your loved ones receive more of your legacy without unnecessary financial strain.
7. Estate planning is an ongoing process, not a one-time event.
It’s easy to forget this crucial information about estate planning—it’s not a one-and-done deal but an ongoing process that can be adjusted over the years to reflect your changing needs and circumstances. An estate plan needs to keep up with the changes in your life, whether you’ve divorced, adopted a baby, or received an unexpected inheritance. Even state laws can make an old estate plan inadequate, so you must always stay ahead of the game. Review your plan often and stay current as your life circumstances change. Regularly reviewing and updating your estate plan ensures it remains accurate and aligned with your intentions.
8. You can hire someone to help you start estate planning.
Did you know you don’t have to make an estate plan alone? Estate planning attorneys are experienced professionals who know how to draft wills, establish trusts, appoint POAs, and protect your estate and loved ones. Working with a professional is often better than the DIY route since they know state and federal laws and can offer customized expertise for your needs and circumstances.
If you don’t want to plan for your future alone, Kelly Cardon Law is here to help. Our Utah-based estate planning lawyers provide 5-star services, including creating wills and trusts and appointing a Power of Attorney. For over 35 years, we’ve been helping Utah residents plan ahead and achieve peace of mind. Whether you have a large estate or have a non-traditional family, our lawyers can provide the estate planning solutions you require. Contact our team to prepare in advance and safeguard your possessions and loved ones.
