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Why estate planning matters

On Behalf of | Apr 25, 2020 | Blog, Trust, Estate Planning, and Probate |

Some people who do not have an estate plan may have failed to create one because they think only wealthy people need estate plans. They might also assume that the process is complicated and expensive. While the idea of preparing an estate plan can feel overwhelming, an attorney may be able to walk a person through the process. If you have assets in the U.S. and abroad, it is especially imperative to have an estate plan that is drafted with the guidance of an attorney.

The first step should be to identify where all important documents are located and ensure that family members know where to find them. People should also make a list of all their assets and debts and their value. They should think about their goals for the estate plan and who they want their beneficiaries to be. Wills and other estate planning documents should be reviewed regularly and after major family events, such as deaths, births, marriages and divorces.

The person may also want to consider using a trust as part of the estate plan. Trusts may be irrevocable or revocable. The former offers more powerful protection, but it also removes the assets in it from the creator’s ownership. An irrevocable trust cannot be changed while a revocable trust can be. Trusts bypass the probate process and allow assets to pass immediately to heirs. There are different tax implications for beneficiaries depending on the type of trust.

Another part of estate planning may be addressing what will happen if a person becomes incapacitated and cannot make decisions about finances or health care. A trust may be designed to address the financial issues, or a power of attorney can designate someone to take this role. People may also want to consider a healthcare proxy, an advance directive or a similar document to appoint someone to make healthcare decisions for them if they are unable to express their wishes.