What does this process entail?
Estate planning is the process by which you plan for how your estate will be distributed upon your death. This involves assessing a client's needs and developing a plan that uses the relevant, legal tools that can protect you and your family. There are many aspects to estate planning including wills,
trusts, powers of attorney, advance directives and guardianship & conservatorship. Estate planning can be broken down into:
- Organizing your emergency information
- Designating a person to handle your financial and legal issues (through power of attorney)
- Designating a person to make health care decisions and access medical records (by creating a health care proxy)
- Creating a living will and communicate your health care wishes
- Setting up an emergency child medical form to protect your minor children
- Signing a will
- Creating a personalized revocable living trust (this helps you manage your assets during an illness or disability)
- Making sure your insurance coverage is adequate
- Filing your beneficiary designations and confirm title to your accounts
- Communicating your estate and financial plan to your family, friends and advisors
- Making changes when necessary to your plan (reviewing often and revising when necessary)
According to a recent survey by U.S. Trust, 51% of those surveyed had created a Living Trust, 43% believed that having a will replaced the need to have a trust and 31% admitted to procrastinating in the area of creating an estate plan. A survey by Lawyers.com found that only 35% of Americans report having a will and only 21% have a trust in place. The NAEPC Education Foundation's news release for National Estate Planning Awareness Week said that "It is estimated that 120,000 Americans do not have up-to-date estate plans to protect themselves and their families in the event of sickness, accidents or untimely death."
According to the 2011 survey by EZLaw Wills & Estate Planning, only 39% of those surveyed with minors in their households have estate planning documents and 13% believe that their spouse and children will automatically receive the assets they have in the event of their deaths. Unfortunately, this is not true. Without a will, the court decides who becomes a child's legal guardian if both parents die.
A 2011 survey by EZLaw Wills & Estate Planning found that "While 60% of individuals surveyed said they believe all adults should have estate plans, only 44% have one." Many Americans do not take the time to create an estate plan because they are ignorant about its importance or they find this process scary, intimidating or overwhelming.
One in ten Americans who do not have any element of an estate plan in place say it is because they do not want to think about dying or becoming incapacitated. Nine percent said that they do not have an estate plan in place because they don't know who to talk to about creating such documents and 24% of adults said that their biggest reason for not having an estate plan is place is because of lack of sufficient assets. Whether you are young or old, healthy or sick, setting up an estate plan is a wise and responsible move.
Why set up an estate plan?
While this area of the law might be new or unfamiliar to you, with a little education, you can be well on your way to setting up a comprehensive estate plan. Why make an estate plan? By setting into place an estate plan, you will be able to ensure future financial security for your family and prevent them from having to go through the often complex and overwhelming probate process. Not setting up an estate plan means wasted dollars and emotional hardship for your family in the future.
An estate plan clearly lays out how your assets will be divided among family members and can help reduce taxes and fees and protect minors in the event of your death or loss of capacity. According to Forbes, over 120 million Americans are living with a chronic disease, such as Alzheimer's Disease, COPD, Parkinson's Disease or Multiple Sclerosis. If you are terminally ill, you will need to create an estate plan that is customized for your particular illness. While we like to think of incapacity and disability as something that happens when we are older, the reality is that all of us at any point in time are susceptible to becoming disabled from an accident, an illness or a random act of violence.
It is wise for individuals to plan for, at the very least, a temporary disability. According to The Wealth Advisor, one in three Americans will face at least a 90 day disability before reaching age 65 and up to 44% of Americans will face a disability of 2.4 to 4.7 years.
Estate planning can be tricky under normal circumstances and in some unique scenarios can be especially difficult (for example, in the case of blended families, non-traditional families and families with a special needs child). Trust and estate laws are continually evolving and vary by state. But if ignorance or fear is holding you back from creating an estate plan, remember: estate planning is not just about you, it is about giving your family the best future possible.
Probate.com has the helpful resources and relevant information you need to know about estate planning and to make this process as simple and understandable as possible. Our site can help you make sensitive decisions and guide you through this tumultuous period. Peruse our site today to learn more about this estate planning and the steps you need to take to protect your future.