For many of us, thinking about how our possessions and assets should be distributed after we are gone, is difficult and scary. We don’t want to think about our own mortality and what it means and as a result we do not take the steps necessary to ensure we don’t leave the burden on our loved ones to figure it all out without the benefit of our guidance.
Whether you consider yourself rich or poor or in between, and especially if you have minor children, creating your estate plan and having it on hand, is an absolute necessity. Here are 5 reasons why:
- You get to decide who inherits. This means YOU and not the government. When we die without leaving instructions for how we would like our assets to be distributed, we leave that up to the government, which through its “Intestacy” laws, determines who will inherit your estate. Some people worry that they have too many family members and would like to have them all inherit but may not actually want to leave anything to some of their family members and may believe their estate is not large enough to share with everyone, so they do nothing, leaving it up to the government to decide how to divvy it up.
- You leave less problems behind for your loved ones. At a time during which your loved ones are already distressed, they face many additional difficulties without a will. If they don’t know whether or not you’ve actually made a will, they will have to spend time, energy, and money looking for your will. If one is not found after a very thorough search, they will then have to apply to the court to get permission to manage your assets. With a will, this is unecessary – they would just need to begin the probate process. Due to the delay in gaining access to your assets, your loved will have to pay your funeral expenses using their own money and may even have to pay inheritance taxes before receiving any of your assets, potentially leading to financial hardship and debt. When they finally get to the point where they can distribute your assets, they will have to do so based on the laws of intestacy, which likely will not reflect your wishes.
- If you have children, you are able to appoint their legal guardians. If you do not leave a will indicating who you would like to raise your children in the event of your death while they are still minors, the government will do it on your behalf and they will do it according to their rules and may not choose the people you would have chosen, to care for your children. This causes stress for your children and other family members, during an already difficult time.
- You can minimize and in some cases eliminate your estate tax liability. Estate tax, is the tax you pay on the value of your estate, at the time of your death. Some of your assets may be distributed through your estate plan in such a way as to avoid being included as part of your estate, thereby reducing your tax liaiblity.
- Your loved ones are able to cover your funeral expenses. With a will in place, your loved ones can gain access to assets much more quickly, and can use any money you have set aside for funeral costs or the inheritance you may have left them, to pay for the funeral arrangements, without having to use their own money. You can also use it to let your loved ones whether you wish to be created or buried, or to be an organ donor.
Creating a will and an estate plan to guide your loved ones after you are gone, is the right thing to do.