Fall has finally arrived, and with it National Estate Planning Awareness month. Each October across the United States, individuals and families are reminded of the importance of creating and/or maintaining an estate plan.
The value of having an estate plan cannot be understated. A plan is necessary to manage one’s accumulated wealth over a lifetime, in turn providing care and support for family members in the years to come. Having an estate plan in place will save your family members both from having to make tough decisions by themselves down the road, and from engaging in the costly probate process.
Three essential estate planning documents everyone needs are a Last Will and Testament, a Durable Power of Attorney, and a Living Will. An estate plan can also include a Trust. Trusts speak for all matters related to asset distribution and therefore bypass the probate process (when properly funded) entirely, thus saving your beneficiaries thousands of dollars.
When a person dies without a Last Will and Testament or a Trust, they are said to die “intestate”. When this occurs, an individual’s assets are distributed according to their particular state’s intestate succession laws. In Kentucky, the order of inheritance is: children, parents, siblings, spouse. That means that without a Last Will and Testament or Trust, your spouse would be fourth in line to inherit any assets in your name.
If you have not yet created an estate plan, you are not alone. According to the American Bar Association, approximately 64% of adults in America do not have a Last Will and Testament or Trust.
When is the best time to prepare these documents? Now. If you are reading this article today, it means that you are a competent, able adult at the present. Unfortunately, though, none of us know what the future holds. According to the Alzheimer’s Association, every 65 seconds someone in the United States develops Alzheimer’s. One in three seniors dies with Alzheimer’s or another form of dementia, more than breast cancer and prostate cancer combined.
It is not just elderly individuals that need estate planning though. Having a plan in place is important for people of any age or income status. At a minimum, couples with young children need to designate a guardian in the event of a sudden death in a Last Will and Testament. In addition, you may want a Trust to provide staged distribution provisions for your young children.
Indeed, there are many reasons to have an estate plan. With so many daily considerations in today’s world, it is increasingly easy to put off a process such as estate planning to another day. We all know, though, that good intentions are just that. During National Estate Planning Awareness Month, move creating a Last Will and Testament or Trust up your priority list, or consider reviewing your plan if you already have one in place. Your family will thank you long after you are gone.