Over the past few years, you have undoubtedly heard of celebrities who passed away without leaving a plan for their multi-million dollar estates. Their loved ones and others spent years clamoring for a share in the wealth, and often, the legal squabbles consumed a considerable portion of the fortune. Also in recent memory are reports of celebrities left at the hands of unscrupulous caretakers because they failed to plan for their own futures despite declining health.
However, these stories are not exclusive to the rich and famous. You may not have millions, but you certainly have goals for how you would like to distribute your hard-earned assets. In fact, having fewer assets may make it even more important for you to make a plan, not just for your property, but for your own future as well.
Planning beyond a will
Estate planning is not just for the old and rich. The various elements of an estate plan can benefit anyone of any age or net worth. The most common use for an estate plan is to express your wishes for the distribution of your assets, typically through a will. However, other estate planning tools, such as trusts, offer a wide array of benefits including these:
- Protecting your heirs from federal estate taxes
- Allowing you to continue to support your favorite charities and causes through your estate
- Protecting your assets from future lawsuits or creditors
- Providing an inheritance for loved ones who – because of age, immaturity, addiction or other reasons – may be unprepared to receive it at the time of your passing
- Establishing funds for a disabled loved one who relies on government assistance
- Planning for the contingencies in your own future
Your estate plan can clarify your wishes for your health care, instructions for the legal and financial management of your estate if you should become incapacitated, and your desires for the end of your life. By including a power of attorney, health care directives and other important instructions, you can relieve some of the stress and uncertainty your loved ones may feel if you are unable to speak for yourself. Without these documents, your family may have to seek the permission of a California court to act on your behalf.
You are not alone if you feel intimidated and confused about the estate planning process. However, you can find peace of mind by reaching out for answers to your questions. Your family will probably appreciate the time and effort you put into these preparations.