What’s the first thing that you think of when someone asks you why you should have a will or estate plan in place? “To protect my family”, someone might answer. “To name a guardian for my child,” someone else might say. Someone else might answer, “My attorney helped me with a combination business plan and estate plan so that my personal assets were protected and separate from my business assets.”
All of the answers are correct! Here are the main reasons why it is important to plan:
1. So that spouse/family/domestic partner/ friends/ charity will inherit from you
2. So that your beneficiaries can get valid legal title to your property
3. To allow you to distribute your property as you see fit, to whom you see fit
4. As part of an overall asset protection plan
5. To choose a guardian for your minor children
6. To minimize tax consequences for your beneficiaries
7. To provide for the continuing needs of a family member by use of a trust
A will or estate plan may have several goals, and it is important that the overall plan is consistent with those goals.
Whether an estate is very large or very small, there are very good reasons to have a valid will and to be certain that the proper legal procedures are carried out in order to transfer the title to the property when someone dies. In some cases, real property is “informally” passed along, with the family agreeing on who lives in the property and pays the monthly bills. Several years later (after many of the original heirs have died and there are 2 or 3 generational levels to deal with) the family may want to sell the property. At that point, it can be complicated to determine legal ownership, locate everyone and complete all the documentation that results in the property sale and distribution of funds. In this case, the family saved legal fees in the past, but may pay quite a bit in legal fees and costs later on.
However, it is important not to create a complicated plan when a simpler one will do! If a simple will meets the important goals, that’s what should be used! An estate planning attorney give you advice as to the best and most efficient plan to use, and can also review current documents and tell you whether it is advisable for you to update them.
