Why Everyone Needs to do Estate Planning

Published in Estate Planning on November 7, 2016

No matter who you are, what assets you own, and who you want to be the beneficiaries of your estate, you need to do some estate planning. Some people don’t need much help to accomplish their objectives, while others need a lot of assistance in accomplishing theirs. The methods that are best for you will vary depending upon who you want to pass your assets to, what types of assets you own, and the value of your assets.  For some people with small estates under $40,000 a will can be an appropriate method of passing assets at death.  This is because we have a small estate procedure in Missouri which allows for the quick and easy transfer of assets at death which applies for estates under $40,000.  For most people, however, avoiding probate is an important goal and consideration because their estates are valued higher than $40,000.

There is more than one way to avoid probate. The best way is typically through a trust.  A trust provides you with the central management (similar to a will where you have an “executor”) but avoids the costs and other negatives associated with probate.  In addition to the costs of probate, which I oftentimes estimate to be similar to a real estate commission, people oftentimes want to avoid probate since it is public (whereas a trust is private) and probate is typically more time consuming to administer the estate to conclusion.  In addition to avoiding probate, trusts provide flexibility to deal with contingencies such as (a) what happens if one of my beneficiaries dies before me, who do I want to pass their share to, (b) what happens if one of my beneficiaries is going through a divorce, is on drugs, or can’t responsibly take care of money or assets, (c) what if one of my beneficiaries have special needs (is on disability or receives other state aid, etc.

Regardless of the value of your estate, everyone needs a Durable Power of Attorney. This is a document where you can designate someone to handle your affairs in the event you become incapacitated.  Even married individuals need to do these because a spouse does not have the authority to act on behalf of an incapacitated spouse.  We usually recommend a pecking order, so you might consider naming your spouse as your primary “POA” (although the technical term for your agent named under a power of attorney is an attorney-in-fact), and then maybe an adult child as the successor agent, and then if both of them are unable to act, another child or family member.  Similarly, a Durable Power of Attorney for Healthcare and Healthcare Directive is an important document to have in place. This allows you to designate an agent for medical purposes and to specify your preferences in whether you should or should not be given certain items of care and/or treatment in the event you are in a vegetative state (persistently unconscious) with no reasonable expectation of recovery.

Planning your estate is probably not as expensive as you think. Contact me to discuss your specific estate planning needs and we can give you a flat fee quote to prepare all of the documents necessary to accomplish your estate planning goals.