What Happens if I do not Have an Estate Plan?
Some people do not create an estate plan because they believe it is unnecessary, possibly because their assets are not valuable or assets are held jointly with a spouse. However, every person is in need of an estate plan and should establish documents that memorialize his or her wishes in the event of death or incapacity.
A General Durable Power of Attorney appoints someone to make financial decisions for you, and a Health Care Proxy appoints someone to make health care decisions for you in the event of your incapacity. If you were to become incapacitated without these documents, someone may have to go through the court system to be formally appointed as your Conservator for financial matters and as your Guardian for medical matters. These procedures can be very expensive, not to mention emotionally burdensome for everyone involved.
A Will provides for the distribution of your individually held assets upon death. It also appoints a Personal Representative, who would be in charge of final administrative matters such as filing last income tax returns, and a Guardian, who would be in charge of the care of any minor children. If you were to die without a Will, the laws of intestacy control the distribution of any individually held assets. This can have undesired consequences, especially when minor children are involved. Your family members, friends or the Probate Court would have to decide who should take control of your administrative matters and the care of your minor children. They are not necessarily in the best position to make such important decisions.
A Trust is an invaluable tool for accomplishing a number of estate planning goals, including estate tax minimization, privacy protection and control of assets after death. It can provide a vehicle to manage assets for minor children. If you do not have a Trust, your estate may be subject to unnecessary court proceedings and additional estate taxes, and distributions of assets could be made to your children (or grandchildren) at an inappropriately young age.
By creating an estate plan now, you can assure that your wishes are carried out, and that your family is not left trying to piece together a complex puzzle without your input.
Material presented on the King & Navins, P.C. website is intended for information purposes only. It should not be construed as legal advice or the formation of an attorney-client relationship. Please consult an attorney for individual advice regarding your own personal situation.