FIRST Consideration of Estate Planning- Who? YOU!
Updated: Jul 30
Adapted from Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education, American Academy of Estate Planning Attorneys, Inc.*
Estate Planning considers many factors. But when most people think of Estate Planning, they just think it answers the question of who gets what. Certainly, it should answer that question. But it is so much more. Estate Plan provides for what happens to you and your assets in the event you are unable to manage your affairs while you’re still alive, not just what happens at your death.
This is the first in a series of articles on the Questions of Estate Planning.
While Estate Planning is about more than just who gets what, it does include that question. If your plan did not include directions as to who should get what, you would have died “intestate.” In other words, you would have died without directing who should get your assets. If you die intestate, the state where you reside has a plan for you, it’s called “intestacy.” Depending upon your state, it will lay out exactly who would get your assets. If you are married or have children, typically they would get a portion of your assets. Your parents may get a portion of the assets in some states. If you’re not married and have no children, your family of origin typically would share your assets.
But you don’t need to rely on your state’s default plan of intestacy. You can do a will or trust and override the off-the-shelf plan the state has as the default for you and everyone else in the state. This brings us to the first question in Estate Planning: Who.
Estate Planning is appropriate for anyone who has legal capacity. With regard to their property, for the minority of people whom their state’s intestate distribution fits like a glove, they may not need anything more to dispose of their assets at death. However, that would be a rarity. Even for those few, there are other pieces to the Estate Planning puzzle.
An Estate Plan provides a plan for what happens to your assets at your death and that’s what typically springs to mind. However, your estate plan, specifically your will, is also where you nominate who should be the guardian of any minor children. While the court decides what’s in the best interests of the child, your suggestion would carry great weight with the court.
So, an Estate Plan is really appropriate for anyone who has legal capacity. Some people may only require a bare-bones plan, such as powers of attorney for property and medical care. However, most people would benefit from a more full-featured plan including a trust and a will.
Future articles in this series will address other questions of Estate Planning.
* Original article at:https://www.aaepa.com/2019/10/the-questions-of-estate-planning-part-i-who/