Co-Authored By: Kyle P. Graham, Associate & Jose A. Nunez, Law Clerk
August is National “Make-A-Will” Month, and a perfect time to reflect on your wishes for the future, both for yourself and your loved ones. One aspect of planning for the future that often gets overlooked is estate planning. It’s a topic that can seem daunting and uncomfortable, but it’s an essential step in ensuring that your wishes are honored, and your loved ones are cared for when you’re no longer around.
Why You Should Create a Will
Dying without a will, known as intestacy, can have significant consequences for your loved ones. The state will step in and use its default laws to determine how your assets are distributed, potentially disregarding your wishes and causing unnecessary stress and expenses for your family. By taking the time to create a will, you retain control over your legacy and ensure your assets are distributed according to your desires.
The Importance of Estate Planning
Proper estate planning is not just about passing on your assets; it’s about creating a roadmap that guides your loved ones through the intricacies of handling your affairs during your lifetime and after your death. Failing to plan can have unintended consequences, leaving your family to navigate complex legal processes and financial challenges. Surprisingly, only one-third of U.S. adults have an estate plan in place, and most of these are individuals over the age of 65.
Components of an Estate Plan
An estate plan encompasses a range of documents that work together to fulfill your wishes. A well-constructed estate plan includes the following key components:
- Durable Power of Attorney: A durable power of attorney (or a financial power of attorney) grants someone you trust the authority to make financial, legal, and business decisions on your behalf. This vital document ensures your affairs are managed according to your wishes, even if you are incapacitated or cannot communicate.
- Will: As discussed, a will is a cornerstone of estate planning, outlining how you want your assets distributed upon death. It also designates an executor to oversee the distribution of assets, pay debts, and handle administrative tasks. Additionally, a will allows you to name legal guardians for your minor children, ensuring their well-being if something happens to you.
- Trust: A trust can be included to avoid the probate process, which can be time-consuming and expensive. Trusts offer more control over asset distribution, can help minimize estate taxes, and offer various other financial advantages.
- Health Care Directives: Health care directives outline your preferences for medical treatment. They also allow a designated individual to make healthcare decisions on your behalf.
Maintaining and Updating Your Estate Plan
Creating an estate plan is more than just a one-and-done task. Life is constantly changing, and your estate plan should evolve to reflect those changes. Major life events, such as marriage, divorce, the birth of a child, moving to a different state, or changes in financial circumstances can all necessitate updates to your plan. Regularly reviewing your estate plan – at least annually – ensures it remains consistent with your goals and circumstances.
As we embrace National-Make-A-Will month this August, let’s consider the future well-being of our loved ones. Estate planning is vital in securing your legacy, protecting your family’s interests, and ensuring that your wishes are honored. By planning and working with experienced professionals, you can leave a lasting legacy that reflects your values and provides for your loved ones long after you’re gone.
To obtain further information or engage one of our Trusts & Estates attorneys, please reach out to request a consultation, or call us at 216-696-1422.
