There is a common misconception that estate planning is for the rich only. If you’re just starting and haven’t accumulated much wealth yet, you might feel that you don’t really need an estate plan. Nothing could be further from the truth than this belief.
Even if you don’t have a substantial estate yet, an estate plan can help you protect yourself, your family, and your future legacy. Especially if you have children you need to consult with our estate planning attorneys in Michigan. They can provide legal guidance on the document’s importance and guide you in creating one.
Why Is an Estate Plan Important?
Without an estate plan, your loved ones could have difficulty settling your affairs after your demise. The process can take a toll on them and impact their lives dramatically, even if you don’t have a large IRA, an expensive home, or valuable assets to pass on to them. Not having an estate plan actually costs more than the creation of an estate plan itself when probate and other fees are considered, as well as delays that will be caused by an estate being tied up in probate court when there is no estate plan in place.
If you consult estate planning lawyers in Bloomfield Hills, you can learn that an estate plan is crucial in the following ways:
Estate Planning Protects Your Beneficiaries
An estate plan makes your wishes clear about what you want to happen to your assets when you’re gone. The primary motivation for estate planning is to designate heirs for what you own, whether a stock portfolio or a second home. If you don’t determine who will receive the property after your death, you won’t have any control over what happens to it later.
Even if your family may disagree with your decisions, an estate plan can save them from many headaches and disagreements in distributing your wealth. Many middle-class families are planning what will happen after losing the breadwinner. An estate plan can offer both order and protection for your family. Consult experienced estate planning attorneys in Bloomfield Hills at Kendal Law Group for an effective estate plan.
Providing for Incapacity
In the unfortunate event that you become incapacitated, you won’t be able to manage your financial affairs. You may assume that your spouse and children will automatically take over if such happens. Still, the truth is that they may have to petition a court to declare you legally incapable of managing your finances. The process may be lengthy and stressful.
An estate plan protects you from this long route by allowing you to designate a financial power of attorney with the legal authority to manage your finances. You should also appoint a medical power of attorney to take over your medical affairs in case of incapacitation.
Ensure Minor Children Are Well Taken Care of
One significant life event that shapes the need and scope of an estate plan is the birth of a child. Drafting a will, one of the documents in an estate plan, allows you to name a guardian to take care of your children if something happens to you before they turn 18.
In addition to naming a guardian who takes over the children’s responsibility, care, and custody, it may also be necessary to name a conservator if you do not have a trust. This is a guardian of the estate who manages any assets you wish to transfer to your minor children. The conservator will be in charge until the children turn 18.
If you have minor children, a trust is highly recommended as it will save thousands of dollars compared to the cost of a conservatorship, and it is far more flexible than a conservatorship and better provides for your children’s needs than a conservatorship – which is the default if you lack a trust.
Planning for Death Taxes
Even in death, the IRS will come after you to review your estate to ensure you don’t owe them federal estate tax. The size of your estate and how your estate plan works will be crucial determining factors on whether they will be any tax payable.
Kendal Law Group can guide you on the estate and inheritance taxes you need to know about. They can also help you implement an effective plan to reduce or eliminate taxes.
Protect Your Family from Probate
A Will alone is not enough to determine how your estate will be distributed after you’re gone. Everything you own will pass through probate if it’s the only legal document you leave behind. The process is court-supervised and serves to validate a Will and oversee the estate distribution. Probate is expensive, emotionally draining, and time-consuming.
The proceedings are also open to the public, exposing your private family affairs to strangers. You can protect your family from all that turmoil by having a trust in your estate plan to effectively pass on your assets peacefully and privately to your loved ones.
What Happens If I Don’t Have an Estate Plan?
You risk leaving everything to the courts if you lack a comprehensive, all-inclusive estate plan. The first thing that will happen upon your demise is that the court will step in to appoint:
- A personal representative, administrator, or executor to handle your estate and oversee the distribution of your assets. In most cases, the court will appoint a close family member, but they may not be the person you’d have preferred
- A guardian if you have children and likely a conservator
Not having an estate plan has various drawbacks and can make life difficult, time-consuming, and expensive for your family. Upon the court’s decision, your beneficiaries will receive everything at once when probate is concluded, which can be problematic on matters like taxes and other complications for minor beneficiaries. You can avoid all this by hiring Kendal Law Group, Bloomfield Hills’ estate planning attorneys to help you plan for your future.
Legal Guidance to Help Protect Your Family and Future
You may not consider an estate plan to be crucial to have, but it will go a long way in protecting your family and wealth. It allows you to expressly state what you wish to happen to the wealth you have worked so hard to acquire after you are gone. Without it, you risk losing everything you worked so hard for, as your assets may be distributed contrary to how you’d have wished.
You should consult Kendal Law Group, and our Bloomfield Hills estate planning attorneys to start planning your estate. It’s never too early or late to start. Our lawyers are ready to help you through the process. We can provide legal counsel, or representation if you have a case to handle in court. Contact us for an in-depth case evaluation so we can best ensure your assets and most importantly your family is properly protected.