5 Things That Happen When You Fail to Have an Estate Plan in Place
Estate planning is an important process for individuals regardless of their wealth, marital status, age, or health. An estate plan is much more than simply directing who will inherit your assets upon your death. A comprehensive estate plan can lower or eliminate estate taxes, protect assets from creditors, provide for incapacitation, protect a family member with special needs, and much more. With a variety of legal documents, an estate-planning attorney can help an individual ensure his or her final wishes are honored while protecting the important people in his or her life.
What Happens if You Ignore the Need for Estate Planning?
Procrastinating and failing to develop and execute an estate plan can have significant negative consequences for your loved ones. If you fail to execute a will and other estate planning documents before your incapacitation or death, some of the consequences may include:
· The government makes decisions for you.
If you do not have a valid will when you die, the laws in your state determine how your property is distributed. Intestate laws dictate who can inherit property from your estate and the percentage each heir may receive. Friends, charities, and some family members may not qualify as an heir under intestate laws. With an estate plan, you control what happens to your property upon your death.
· A conservator or guardian may be appointed if you become incapacitated.
An important element of an estate plan is to appoint someone to make decisions for you in the event of incapacitation. Without a Power of Attorney, Living Will, Health Care Directive, and other estate planning documents, the court will appoint someone to make very personal decisions for you and manage your finances and property.
· Your children may be placed with someone you would not desire as their guardian.
With an estate plan, you name the person or persons to serve as guardians and trustees for your children upon your death. Without a plan in place, the court decides who will raise your children and manage their inheritance. The court may appoint someone you do not trust to fulfill this vital role in your children’s lives.
· Your heirs may owe more taxes than necessary.
With an estate plan, you can lower or eliminate the amount of estate taxes or transfer taxes your heirs must pay after your death. By utilizing various trusts, you can avoid probate and protect the assets from your creditors and your heir’s creditors.
· Your children could inherit a large sum of money at a young age.
Without a will, the court will appoint someone to manage your child’s inheritance until he or she reaches the age of 18 years. At 18 years of age, your child receives his or her inheritance. For many young adults, receiving a large sum of money can be overwhelming and even detrimental to their wellbeing. With a will, you can place money and assets into a trust for the benefit of your child until he or she reaches a certain age that you choose instead of an age the state chooses.
Take Steps Now to Put an Estate Plan in Place
There are many other consequences of failing to have an estate plan. To learn more, consult with an experienced estate-planning attorney. Experienced estate-planning attorney Steve Thienel is dedicated to assisting clients in Virginia, Maryland, and throughout the DC Metro area. Contact Thienel Law, LLC today for assistance with your estate planning or administration needs.