A common concern we hear in the initial stages of estate planning is that people think they do not have enough assets for an estate plan to be worth it. “I just need a simple will,” they often say. However, the premise of an estate plan is not for tax purposes (unless you are a multi-millionaire) and is not about solely about distributing the money. The primary reason for an estate plan is to develop a strategy – to put a structure in place that gives you the flexibility you want and will handle the contingencies of life.  

A good example of this can be seen in a complicated trust we recently developed. Our clients were looking to leave their vacation cabin to their 15 grandchildren with the expectation that they would all be able to use it. While the cabin was only worth $25,000, it was important to them that all their grandchildren would have access and that there was no animosity within the family. By establishing these wishes through a trust instead of a will, they guaranteed they would be honored once they were gone without causing needless complication or court involvement.
Beyond the transfer of wealth and assets, there are other factors that should prompt you to have an estate plan in place, such as:

1. Minor Children: Who will be responsible for looking after your children? What happens if that person is no longer around? There are many circumstances where if custody goes through the court systems, your children may not end up with who you intended them to be with. An estate plan eliminates any doubt of who has custody once you are gone.
2. Power of Attorneys (medical & financial): If you are in the hospital, do you want your loved ones to be able to make decisions on your behalf? The medical and financial power of attorney documents inside of an estate plan ensure the person you put in charge is able to make decisions should you become incapable of doing so. 
3. Interpersonal Conflicts: You may believe fighting about assets and medical care is above your family, but we have seen it countless times when there is a lack of an estate plan in place. With a properly thought out and explained estate plan, many conflicts between family members can be avoided. Without a consistent plan, you may have inadvertently left landmines. [WB1] 

Some estate plans include a trust, but many do not. Without a trust, your wishes will be honored, whether that is through a beneficiary designation or through your will. With a will, for your assets to be allocated according to your wishes, they will have to go through the probate courts, which usually means:
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1. Loss of privacy: Everything now happens under the oversight of a judge, meaning you have invited a third party to weigh in and judge your family dynamics. If there is a will in place, it is left up to the judge’s interpretation, which could result in unwanted outcomes. For example: recently we had a home-written will that had to go through probate court. The judge assigned decided the will was ambiguous and therefore needed another hearing and opened a can of worms.
2. Unwanted Expenses: The cost of probate can be substantial. Even the most basic cases, not involving any conflict, can involve attorney and court fees totaling thousands of dollars, even for a small estate.
3. Delays: The average uncontested probate case may take longer than a year. You are at the mercy of the court timeline.

With a proper estate plan in place, these inconveniences can often be avoided. Beginning the process of creating an estate plan tends to be the hardest part. Take the first step by consulting a lawyer to get all your questions answered and come up with a strategy specific to your needs. From there, your attorney will walk you through the entire process.

Keep in mind, it is often less expensive to set up an estate plan and go through the work on the front end, rather than not having one in place and going through probate. In many cases, estate plans can be done in less than three weeks.

Start today with a free consultation.

One of the biggest misconceptions surrounding wills is the notion that if you have one, your family won’t have to go to court once you’re gone. Unfortunately, that is not the case; a will only deals with property that does go through court.
Let’s take a step back and look at what a will is and what probate means.

• A will is a legal document that spells out your wishes regarding the care and distribution of your assets after your death. A will cannot reach out and grab things, it can only direct property that is already going through the courts.

 

• Probate is the court process that deals with the transfer of your assets when there is no other alternative. Assets only go to probate when there is not already another way for those assets to transfer to the next owner, such as a transfer on death deed, joint ownership, trust, or a beneficiary designation set up prior to death.

In layman’s terms, a will is a set of instructions to the probate court on how to distribute your probatable assets. However, not all assets will end up in probate.

Let’s look at an example where this would be the case: Say you pass away, and your will specifies that your two children are to inherit the house, but you have a beneficiary designation in place that names only your oldest child as the heir to the house, what happens next? Since a beneficiary designation triggers first, the house would stay out of probate and be given to your oldest child, even though your will specifies otherwise. If you did not have the beneficiary designation set up, the house would then go to probate court and your will would designate where the house goes. 

If a will cannot keep your family out of court, how do you ensure your assets go where you intend while also keeping your family out of court? The simplest way to do this is to create an estate plan.

• An estate plan is a strategy, often including a collection of legal documents, that, if done correctly, lets you decide where your property goes and allows your loved ones to avoid probate after you pass on.

An estate plan typically includes a will, powers of attorney, trusts, and advance directives.  It is a comprehensive strategy that dictates not just who will receive your money, but who can step in to take care of you, and lets you take care of the people you are leaving behind according to your intentions. Having an air-tight plan in place will give your loved ones peace of mind when you are gone.  

If you have been thinking or on the fence about creating an estate plan, here are four things you should consider:

• An estate plan is beneficial to everyone, not just wealthy individuals. It does not cost as much as people believe and can be done in less than three weeks. Start the process with a free consultation.

 

• At a minimum, you can, and should, have a basic estate plan that requires no documents and no financial obligation. This would be a simple strategy that shows you have thought about what happens if you get sick and where you would like your assets to go.

 

• If you are planning on putting together your own estate plan, make sure you are educated, and your plan is intentional. However, just because you can do it by yourself, does not mean it is the best decision. After all, just because you can purchase and install car parts yourself does not mean you wouldn’t consult an expert beforehand.

 

• Just start – You might not know all the answers right away, and that’s okay. Do not make it more complex than it must be. Working with an estate planning attorney will help you answer every question and keep track of everything needed.  

As a closing thought, when deciding if you need a will or an estate plan, keep in mind the limitations of a will. A will serves certain functions. If it is used correctly, it works great. But, if you are intending for it to do something it cannot legally do, it will not work.

Ask yourself how a will fits into your overall strategy. If what you think you need is a will or a will is all you have but you have no strategy to go with it, an estate plan may be what you are actually looking for.

Talk to one of our lawyers today by setting up a no-obligation consultation to decide what the right step is for you.