Why Estate Planning Is Still Important
With the federal gift and estate tax exemption currently at $5.25 million per person ($10.5 million for married couples), some with “smaller” estates may wonder if they need to do any estate planning. But there are many reasons to do estate planning other than to avoid estate taxes. The real reasons we need to do estate planning still remain: to take care of ourselves and our families the way we want. Here are the top ten reasons we still need estate planning.
1. Ensure Your Assets Are Distributed the Way You Want
Everyone has an estate plan, either the one you have created or the default plan of the state in which you live. It is very unlikely that the state’s default plan is what you would have wanted. Non-family members, like an unmarried partner, will not receive any of your assets under the state’s plan.
2. Avoid Probate
If you don’t have a plan, your assets will probably have to go through a court process called probate. If you have a will, the assets it controls will have to go through probate before they can be fully distributed to your heirs. The time, cost, and loss of privacy and control that come with probate should be avoided. That is why living trusts are becoming ever more popular.
3. Provide Responsibility for Minor Children or Grandchildren
If any of your heirs are minors and you have not made an estate plan, a court will control the minors’ inheritances until they reach a legal age (usually 18), at which point the heir will receive, in cash, whatever is left to spend as they see fit. For most eighteen year olds, that is a recipe for disaster! […]