I don’t have a large estate. Do I need an estate plan?

An estate plan goes much further than a will. Not only does it deal with the distribution of assets and legacy wishes, but it may help you and your heirs pay substantially less in taxes, fees, and court costs. You should always consult an estate planning attorney to discuss your unique situation to determine what may be a best approach for you.

A number of major life events help shape the need for and scope of an estate plan.

  • Marriage: It doesn’t matter if it is your 1st or 3rd! You don’t want to leave your new spouse out of your estate plans.
  • Divorce: It is just as important to update your plans to make sure that spouse #1 is not benefitting or has control over anything you may leave behind.
  • Birth of a child: While congratulations are in order, as a parent you also want to make sure that their future holds only the best for your child/children. The best way to do this is through estate planning, especially if something catastrophic should happen to you. Who would raise your child?  Without a plan in place the court would decide who would raise your child… and it may not be someone you would have chosen yourself.
  • Medical event or diagnosis: An illness or accident can happen to anyone at any time. Should that lead to incapacity, you will want to have the proper estate plan documents in place to facilitate your healthcare, legal and financial decisions.
  • Blending families:

Blended families can make estate planning more complicated. For example, a parent may want to leave a different inheritance to biological children than to stepchildren, or the parent may want to protect their biological family’s inheritance in the event that a spouse remarries. A solid estate plan can help prepare for these and other scenarios.

Consult an attorney to discuss your particular circumstances.

Other considerations for creating an estate plan:

  • An important factor in defining an estate plan is the size of your estate. Does the value of the estate exceed the estate tax exclusion?
  • You have an opportunity to incorporate charitable giving and business succession into an estate plan.
  • Examine other issues around how best to manage the intergenerational transfer of assets. For example, if children aren’t old enough or mature enough to handle a large inheritance, an estate plan can address this by making provisions through a trust.
  • Many people think of estate planning as a process that needs to be done to prepare for what happens when you pass away. However, a critical component of estate planning includes documentation in the event you become incapacitated. Be sure to learn about the key foundational documents (Healthcare Proxy, HIPAA Authorization, Power of Attorney, Advance Directive and Last Will & Testament. With the exception of the Last Will & Testament, these foundational documents can be critical to facilitate your needs should you experience an episode of incapacity.
  • If you own a business, have you considered how best to plan for the business once you have passed away?
  • A key advantage of an estate plan is its power to minimize the probate process and its expenses, delays, and loss of privacy. Among the concerns with probate are:
  • Loss of privacy: Anyone can access information from the probate court. For example, relatives and creditors could get your probate records to challenge your will.
    • Expense: Probate fees can be quite substantial, even for the most basic case not involving any conflict. Attorney’s fees and court costs may possibly take up to 5% of an estate’s value.
    • Delays: The average uncontested probate may possibly take longer than a year. With proper planning, these delays and costs, and the loss of privacy, can often be avoided.
  • Another key consideration is any heirs/beneficiaries who are Special Needs. Should an heir/beneficiary have disabilities, there are specific trusts that can be create. Such trusts that benefit someone who is disabled, are structured in a way that allows the beneficiary to continue to qualify for public assistance, such as Social Security Disability Insurance.

Again, an attorney can help establish a trust that will meet your specific situation.

Engaging in estate planning can be an important activity at various points throughout your lifetime; there is no ideal age at which to begin the process. If you already have your estate plan documents, review them to see if you are still comfortable with the named individual(s), and work with your attorney to make sure the documents are current and accurately reflect your wishes. Be sure to seek the counsel of an experienced estate planning attorney to ensure that the plan you create meets your goals for today and in the future.

©Surprenant & Beneski, P.C. 35 Arnold Street, New Bedford, MA 02740, 336 South Street,   Hyannis MA 02601 and 45 Bristol Drive, Easton MA 02375.  This article is for illustration purposes only.  This handout does not constitute legal advice.  There is no attorney/client relationship created with Surprenant & Beneski, P.C. by this article.  DO NOT make decisions based upon information in this handout.  Every family is unique and legal advice can only be given after an individual consultation with an elder law attorney.  Any decisions made without proper legal advice may cause significant legal and financial problems.