If you think estate planning is not needed because you “don’t have much” or you’re “not rich,” strongly reconsider. Estate planning isn’t only for the rich, and could be even more important to you. Sure, estate planning involves asset protection, smooth transfers of generational wealth, and strategies to minimize taxes. However, arguably the most essential component is to avoid leaving pain and turmoil behind for your family. Whether you own a lot or a little, here are some reasons why all people should design a customized estate plan.
To protect your kids
Your kids are truly your biggest “assets,” and the ones you want to protect the most. However, if something happened to you today, who would take care of your kids?  You may have arrangements for who can pick them up from school or sports, but have you formally named guardians? If not, when the police arrive to inform family about your tragic death or injury or they are called out out of panic when you don’t show up for hours, this could happen:
- Your kids could be taken into child protective services for days or weeks until guardianship is sorted out in court;
- Conflict could arise among family and close friends as to who is the best guardian, creating an ugly and lengthy legal battle;
- A court could ultimately appoint a guardian who you would never have considered; someone your kids do not know, you do not trust, or does not share your values.
While naming guardians in a will is a step in the right direction, it is ineffective if the situation is you are incapacitated but have not died. Separate guardianship documents naming short-term and long-term guardians for your kids will provide you with the peace of mind that your kids will be protected and cared for by those whom you trust when they will need it most.
To make health care decisions
An advanced health care directive and a HIPAA waiver will authorize your chosen appointees to receive your confidential health information and make decisions on your behalf if you ever are incapacitated. You can define the parameters of when incapacity occurs, and also provide direction as to your wishes for specific health decisions. A major one is what should happen if you ever become dependent on any life-prolonging device, like a breathing machine. A “living will” ensures your wishes about being on life support are clearly stated so they can be followed without question or conflict.
To protect your home
If you own a home, this is a great reason why you need to be thinking about your estate planning. For a lot of families, their home is their biggest asset. Unfortunately, an unclear plan for what happens to your home when you die exposes its ownership to uncertainty, liabilities of possible beneficiaries, and unnecessary costs to your loved ones. Putting your home into a trust is one great way to direct its clear and immediate transfer while protecting its monetary value from unnecessary taxes and probate fees.
To make strategic tax decisions
Whether rich or poor, everyone has to pay taxes, even in death. Estate tax exemptions are very high right now, but income taxes effect everyone. Deciding how you want your assets to be distributed to your beneficiaries when you pass has significant ramifications, and an estate planning attorney can advise you how best to structure your distributions in the context of current tax law to maximize the most value for your family.
To ensure that your wishes, values, and legacy are carried on to future generations
Regardless of the amount of assets in your estate, everyone has personal values. An estate plan can help you pass down these values to your family and ensure that your legacy is carried on to your children, your grandchildren, and even their children.
If you live in Southern California and have questions about how you can best protect your family for when they will need it most, contact the team at Snyder Law, PC. Â We look forward to meeting you and helping you achieve the peace of mind you deserve.
