DO YOU NEED A WILL
Estate planning is a concept which most people have heard of, but as to which they haven't done much if anything about. Many people procrastinate, putting off until later dealing with such unappealing issues as what will happen when I die, how will I be cared for if I should become disabled , or how can I protect my loved ones in difficult times? Some people think they don't need to bother with estate planning because they don't think they have many assets to deal with. Other people put off the issue because they don't know whom to call to obtain assistance.
Do you need a will? Does any member of your family need a will? The answer is that just about everyone needs a will, even if it is the simplest kind.
1. You need a will if you have minor children. Although not pleasant to think about, who would care for your minor children if you and your spouse were to die in a common accident? A number of years ago, we were called upon to represent the children of a couple who had died in their early 30s in an automobile accident. Since this couple did not have a will, guardianship proceedings had to be instituted through the courts. All expenditures on behalf of the four minor children had to be sought from the court and approved by it. The guardians consisted of a brother of each of the deceased couple, because each family had an equal right and insisted on it. The two guardians did not get along. Every issue, therefore, became a fight.
Every cent had to be accounted for in filing with the court. The lengthy guardianship proceedings were acrimonious, expensive and unnecessary. Had the couple executed wills, they would have had the opportunity to name guardians for their children, and to identify who should handle their assets as trustee for the benefit of their children. A will for a young couple with minor children is not a complex document, but is one which may avoid many unnecessary problems.
2. You need a will if you want to control how your assets are to be distributed. A Last Will and Testament is a solemn document which is given full credence by the court if properly executed. For persons dying without a will, teach state has a statute which will direct how your assets are to be distributed. This may or may not be consistent with your desires. Having a will enables you to have your personal effects and property distributed to those persons whom you wish to receive it.
3. You need a will if any of your assets are to be left to a minor, an individual with a disability, or an individual for whom you wish to provide the benefit of your assets without specific financial control. There are many circumstances in which it is preferable not to pass ownership of assets to the ultimate beneficiaries outright. In these circumstances, a "testamentary trust" will allow you to name who should act as trustee for the beneficiary.
4. You need a will if you have tax planning objectives. Presumably, you have worked hard during your lifetime to accumulate the assets which you have. Federal estate tax is imposed on all assets passing at your death including life insurance. With net assets in excess of approximately $1,000,000, the tax bite exceeds one-third and quickly escalates. Why share your assets with Uncle Sam when proper tax planning can maximize the amount of your assets which pass to members of your family? Tax planning may not be necessary for everyone, but use of certain simple techniques can minimize the amount of taxes which ultimately must be paid.
What Other Documents Should You Have?
Estate planning consists in part of educating you as to available tools for use and in preparing those documents to accomplish your objectives and give you peace of mind. In some circumstances, but not all, living trusts may be an appropriate vehicle. In most circumstances, individuals should consider preparing a "Living Will" or Advanced Medical Directive to avoid the artificial prolonging of life upon a terminal illness.
Consideration should also be given to executing a Power of Attorney, which would provide great assistance to those caring fore you in the event you become disabled. These documents are not complicated, but the time to put them into effect is now, before problems arise.
Have you come to grips with your needs in estate planning? Or, are you putting it off? Consider your family. Have your parents made satisfactory arrangements for their estate planning, have your siblings and your children done the same? Your parents, and other benefactors, should consider initiating plans which may be extremely beneficial to you and/or your family. The law allows them to achieve substantial tax savings which will be impossible for you, using the same assets passed on to you at their deaths. We would be happy to discuss with you your estate planning needs, whether they be simple and straight-forward or require more complex analysis. Please give us a call.