Why Proper Estate Planning Is So Important
Summary: An estate plan is a legal tool that enables you to protect yourself, your family, and your assets. While it may seem awkward or stressful to begin working on your estate plan, remember: this is your opportunity to take care of your loved ones and protect your life’s work.
Why Proper Estate Planning Is So Important
An estate plan is a legal tool that enables you to protect yourself, your family, and your assets. With an estate plan, you can safeguard and manage your property and other hard-earned assets if you become incapacitated or pass away. You can provide financial security for your loved ones and make sure that your young children are protected in the event of an emergency. An estate plan can even help you avoid the probate process so that your beneficiaries receive your assets in a way that you control – not controlled by the government or the IRS.
Despite all of the advantages that an estate plan can provide, only 42% of adults in the U.S. currently have some sort of estate plan in place. Why is that? Why do so many people not take the time to create a plan that will protect their family and the things they’ve worked so hard for?
Common Estate Planning Misconceptions
Many people mistakenly believe that estate plans are only for those who are older or more established. Or that only people who have a lot of money or expensive items should have an estate plan. But that is simply not true. Under Georgia law, anyone who is 14-years or older can legally draft a will. There are no requirements related to the amount or value of your assets, and taking care of your children and family is important, regardless of your wealth. Also, while there is not necessarily a “right time” to start working on your estate plan, you might consider it after a major life event such as marriage, purchasing a home, having children, divorce, or a death in the family.
Another common misconception is that the estate planning process is overwhelmingly complicated, time-consuming, and expensive. But this is also inaccurate. Yes, putting together a proper estate plan can take some time, typically involving a couple of meetings with your attorney where you discuss your options and choices. But consider this: an investment in an estate plan means that you will have peace of mind knowing that your family and your life’s work will be protected in case of an emergency. There are also some steps you can take beforehand to start to get your thoughts and your paperwork organized:
- Gather important documents (ex: deeds, financial documents, life insurance information) and make sure that family members know where those records are safely stored
- Gather copies of your most recent bank statements and other accounts, including insurance policies
- Prepare a list of the important people in your life (spouse, children, relatives, friends) and their contact information
- Prepare a list of any assets you own (house, vehicle, jewelry, collectibles) and their values; be sure to note any liabilities like a mortgage
- Consider your goals for your estate plan, such as who you’d like to operate your finances if you’re unable to, who you’d want to take care of any minor children, or who you would like to receive your different assets
- If you already have any estate planning documents, review the information to ensure it reflects your current family status and your wishes
Meeting with an estate planning attorney ensures that you receive guidance on the different estate planning options and best strategies for you. Depending on your personal circumstances, your estate plan may be as simple as your will, power of attorney, and advance directive for healthcare. However, if there are more complex issues or assets (ex: business interests, real estate investments, retirement accounts), your estate plan may be more complex. You also want to make sure that your plan adheres to Georgia law and that all of your documents are complete and accurate.
Estate Planning Tools: Wills and Trusts
With a will or a trust, you can protect your life’s work and also have the final say about how those assets will be managed after you pass away. However, these estate planning tools do function a little differently when it comes to the probate process.
A will is a legal document in which a person provides instructions for the handling or their estate and distribution of their assets upon death. You can use a will to pass specific assets to designated individuals or causes and place specific assets into a trust. In your will, you can also designate a guardian for any minor children and name an executor or personal representative to manage your estate. Wills go through the probate process and have to be submitted to the court. Having a will can make the probate process easier for your loved ones and ensure that any emotionally valuable items end up with the right person.
A trust is another valuable estate planning tool, and it does operate differently than a will. To begin, when you file a will with the probate court, it becomes public record. Anyone can pull the file and view it. A trust can provide privacy and a higher level of control. In a general sense, a trust is a legal arrangement in which one party is designated to hold property on behalf of another party. Trusts do not have to go through the probate process, which means that a person can easily and privately direct funds to individuals or causes they care about. With a trust, you can also take care of minor children, plan for contingencies, and designate a trustee to care for you and your assets in case of an emergency. If you are interested in creating a trust, it is best to speak with an experienced estate planning and probate attorney, who can advise you on the best type of trust for you and your goals.
Keeping Your Estate Plan Current
Just as important as completing your estate plan is making sure that everything is current and accurate. Once you have your estate planning documents, you should occasionally review them. It’s a good idea to check your paperwork after major life events and anytime you have a significant change in your finances. You should also double-check the beneficiary designations on your life insurance policy, retirement accounts, and bank accounts to ensure that they are up-to-date. Keeping your estate plan current means that your wishes will be honored as you intended.
Have additional questions? Contact estate planning and probate attorney Sarah Siedentopf
While it may seem awkward or stressful to begin working on your estate plan, remember: this is your opportunity to take care of your loved ones and protect your life’s work. You are in control of the situation and decision-making, not the government or the IRS. If you have additional questions about estate planning or updating your current documents, please contact Siedentopf Law at (404) 736-6066 or via our website.
© Sarah Siedentopf and Siedentopf Law, 2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Siedentopf Law and EstateLawAtlanta.com with appropriate and specific direction to the original content.
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Whether you’re in the Atlanta and Brookhaven areas, or in Cobb, DeKalb , Fulton, Gwinnett, or another county in metro Atlanta, we can help you. We can also work with executors by phone or video conference if they are out of state or far away. Only after listening carefully will we present the options that are right for you and explore the benefits and costs of each one.