You only need a will if you have any assets you want to pass on. It is an unavoidable fact we will each die and someone is going to deal with our "stuff." A will is the document which instructs who that someone is and how he or she is to distribute your assets.
What Is Estate Planning And Why Is It Needed?
Most people often assume that they don’t have estates or assets to plan for, but everyone has an estate, whether they know it or not. Estate planning is just putting on paper what the person wants to do with their stuff. Unfortunately, most people never do anything with regard to estate planning, and these decisions get put on a spouse or a child, which often causes in-fighting and bad feelings, and this is especially true if there’s a second marriage involved. So failure to get good, professional help, when there are multiple parents involved, is an almost certain way to ensure that what would have been taken care of simply is now a big problem and will often require litigation to get a judge to make those decisions.
What Happens To Someone’s Assets When They Pass Away Without Setting Up An Estate Plan?
Each state has a statutory plan for that situation. The state has, in essence, drafted your will for you. Those plans or statutes get tweaked periodically, but generally, if there is only a first marriage and all of the children belong to both spouses, then the entire estate, when one spouse dies, goes to the surviving spouse. However, if there are multiple parents or beneficiaries, due to prior marriages or a blended family, the surviving spouse will get a certain amount from the estate but then must divide everything else with the children. When you get into what the surviving spouse is allowed to keep and what goes to the children, that often ends up in litigation.
How Often Should Someone Review Their Will Or Estate Plan?
Most estate plans are drafted to take care of future situations that may occur. However, an estate plan can’t foresee changes in the law or major changes in the family structure. When that happens, it’s good to have a quick review with an attorney. For instance, when the beneficiary is in an accident and now needs special care or otherwise becomes disabled, that would be a good time; or if a parent becomes incompetent or a divorce or death occurs, those are good times to visit an attorney.
What Are The Basic Items In An Estate Plan? What Do They Do?
An estate plan has two broad objectives: Who can help you while you’re still alive and how your estate is disbursed after you die. A lot of people forget the first area. That first area is dealt with by using powers of attorney. There’s a financial power of attorney, which gives someone the ability to help write checks or take care of an individual’s financial dealings. That power can go into effect at the time the power of attorney is signed, or it can be made to only go into effect after you become disabled. There is also a healthcare power of attorney, which deals with the medical decisions in the event you’re unable to make those decisions yourself. So you can give that person very broad or very narrow powers, depending on what you want.
A power of attorney is actually not expensive at all to draft if it’s done while you’re competent; otherwise, a court case may have to be filed to have someone appointed by the court to make those decisions for you. This is called a guardianship or conservatorship. That can become very complex and quite expensive to do, so it’s very important to get a power of attorney in place.
The other part of an estate plan generally includes a will and a trust. One of the goals in setting up an estate plan is to avoid probate. While, in theory, everyone needs to open a probate, the reality is that most probates are opened to give someone the power to sign for the person who died. A classic example of this is the family home. After the owner dies and there is no trust in place, there is no one who can deed the house to someone new. So a probate will be needed to give that power to someone. In the last 25 years or so, simple trusts have become very popular because when the house is placed in a trust, there’s already a successor in place. So when the person dies, the successor can immediately sign the house over without the need of going to court and filing a probate action. A typical family will have a house and maybe some investments or bank accounts, which will need a signature on file. These accounts can be put into a simple trust, so probate’s avoided, everything’s kept private, and it’s just a much easier, smoother and less expensive way to take care of what otherwise would involve probate.
Of course, there’s always a will, and it accompanies the trust to take care of everything that didn’t get put in the trust. If you are renting and you don’t have anything that is titled, then you may not need a trust, and just a simple will can take care of those issues and explain who gets what.
There are many sources on the internet and in bookstores with blank will forms and if your situation perfectly matches the form, you might be okay. Never-the-less, lawyers have specific education and testing on how to draft wills, with the many issues involving estate succession and actually understand the words in the will and which words, clauses and paragraphs should be used. You aren't really paying for the words as much as the experience and training of the lawyer to make sure it is done right.
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