A Simple Question: Who Needs an Estate Plan?

A simple answer: nearly everyone. 

• By executing a Will or a Trust (an estate plan) you are putting in place a formal method of determining what happens to your assets when you are no longer alive.  In simpler terms an estate plan answers the question "who gets what and when?" after you’re gone.

• While everyone needs an estate plan not everyone needs a Trust. For many, the combination of a Will and beneficiary designations will ensure a smooth transfer of assets upon their death.
  

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Estate Planning Basics:

* Joint ownership is not an estate plan.

• Although there are a select few who can use this method and accomplish their objectives for most this is not a good idea.  When it comes to real estate it is rarely a good idea.  If you don't know why this is true - call me.

* The Probate Court is not your enemy.
This is directly related to the "joint ownership" plan. 

• Many people's idea of estate planning begins and ends with avoiding Probate Court.  Avoiding Probate Court, in and of itself, is not an estate plan.  In many cases administering your estate transfer through the Probate Court is a perfectly reasonable and cost-effective plan.
  

* Estate planners look at the big picture.
This is directly related to the first two points: the goal of estate planning is to make sure all phases of the plan work together. 

• If an elderly adult man adds his three adult children on the deed to his home he has succeeded in avoiding probate court.  But who is responsible for property taxes or any maintenance after he dies?  What about any unpaid mortgages or lines of credit?  If there is equity, how does everyone cash out?  If home repairs are needed who must pay for the repairs?  The "joint ownership plan" does not answer these questions very well.
  

• If you can't answer these questions - call me.

The circumstances of your life will change over time.  For example:

• Five years after you sign your Will you may move; a few years later you may have a different job.  Ten years from today you will probably drive a different car. These and other life changes will often involve some sort of financial cost to you.  

• Because the circumstances of your life will change your estate plan may need to change too.  What's best when you are in your mid-30's with young children may not be necessary when you are retired and the kids are grown. Because of this you should expect to change your plan every so often (three to five years in the norm). 

* There is a difference between cost and value.
In the estate planning context, cost is what you pay for an estate plan. Value is what you get.

• When you execute an estate plan that considers all your current circumstances (not just one isolated objective) you can rest easy knowing that if you pass away a week after your plan is in place, you have made life a little easier for those left behind.  What is that worth?

• Part of the estate planning process is determining what you own, how you own it and what you want to do with those assets when you are gone.  When the process is all done, you will have a good idea of where you stand financially.
  

• Since I also help people with estate administration I can explain the different ways one can transfer assets to their heirs so they can be sure they are choosing the most cost-effective plan.