A good estate plan offers a wide-range of benefits, such as protecting surviving loved ones or reducing taxes. While the main focus of the estate plan depends on an individual’s unique needs and circumstances, there are some universal benefits for everyone.
A well-drafted estate plan yields benefits even before one’s death: it protects assets for the benefit of an incapacitated person by placing them in a trust managed by a responsible trustee; it lets one designate an agent to make health and financial decisions in times of incapacitation; and it allows to plan for retirement by assessing and organizing one’s assets and needs.
With a good estate plan, a deceased’s family is spared from making difficult decisions such as when or if to withhold life supporting treatment or how to handle a loved one’s remains. These tough decisions can be made in advance in one’s estate plan for the family to follow and thus alleviate some of the burden from the family during the grieving period. Furthermore, clearly and transparently expressed goals and wishes for the final distribution of one’s estate helps remove some of the emotion and conflict associated with the division of money and other assets.
Very importantly, an estate plan ensures that one’s family is instantly protected: there is enough money instantly available to pay bills and other living expenses; financial affairs are organized and the accounts are accessible to the loved ones immediately, without awaiting probate and the court’s permission; the guardians for the minor children are appointed and their grief and trauma is not further amplified by the involvement of Child Protective Services; special needs children and adults are provided for with a trust that can supplement their needs in addition to their governmental benefits; and young adults’ education is secured with a college fund.
A comprehensive estate plan is also crucial for business owners. Without an estate plan, or at least some succession plan, the business can collapse rapidly after the owner’s death, ultimately causing a financial hardship for the deceased’s family. An estate plan can provide the rules and instructions for the business to transition to a new owner and assure its continuity.
In addition to lessening the expenses associated with probate court costs and attorney’s fees, a good estate plan helps reduce taxes by developing the most tax-efficient approach. There are various tax reduction strategies that can be implemented to minimize the amount of taxes collected on a deceased’s estate, which results in more money being available to the surviving family.
The estate planning process also provides for the support of one’s favorite charitable cause after death. It does not mean that like some philanthropists, one has to leave most of their estate to charity. Even a small gift can make a big difference and shape the way one is remembered. Legacy planning can be as simple as a one-time financial gift or it can be structured as a charitable trust, a family foundation, or a scholarship fund.
Life is unpredictable. At least some uncertainties and concerns can be addressed with a good estate plan that offers a wide range of benefits intended to protect one’s well-being and family’s wealth. It is never too early to prepare oneself and one’s family for unforeseen challenging situations.
Natalia Vander Laan is a Minden attorney and owner of Vander Laan Law Firm