Sometimes the best way to get the gist of a subject is to absorb a series of relatively quick questions and answers. In this post, we are going to provide a hypothetical conversation between a new client and an estate planning attorney. After you go through it, you will come away with a much better understanding of the estate planning process.
You don’t need an estate plan until you are a senior citizen, right?
Unfortunately, far too many people adopt this perspective. Studies consistently show that a very small percentage of people under the age of 50 have estate plans in place. While it is true that most people do not expire when they are young adults, there is no reason to take any chances.
Individuals of all ages pass away each and every day, so you should definitely establish an estate plan as soon as you are a self-supporting adult. This is even more important for the parents of dependent children. When you develop a relationship with an estate planning attorney early on, you can revisit your original plan and make the appropriate adjustments as your life changes over the years.
I have heard that trusts are only for the wealthy. Is this true?
The term “only” is the part that is patently untrue. Wealthy families that are exposed to the federal estate tax do in fact use certain types of trusts, but there are other trusts that can be useful for people that are not among the financial elite.
A revocable living trust can be the ideal choice for a wide range of people. One of the major advantages of a living trust over a last will is the avoidance of probate. This is a costly and time-consuming legal process that strips your family of privacy. Asset transfers take place outside of probate when a living trust is utilized.
This is one of the benefits that living trusts provide, but there are others. Plus, it is worthwhile to note that there are additional types of trust that can be useful for people that are not multimillionaires when certain circumstances exist.
Can you plan your own estate without a lawyer?
It is possible for a layperson to execute a legally binding document like a will or a trust without legal guidance. In fact, there are websites on the Internet that sell boilerplate, fill-in-the-blanks worksheets that you can use to plan your estate.
Is this a good idea? Since we are estate planning attorneys that welcome clients, you may take our answer to the question with a grain of salt, so we will not endeavor to answer it. What we will do is cite a study that was conducted by the highly regarded publication Consumer Reports.
They wanted to find out if do-it-yourself estate planning was something that they could recommend, so they conducted a test. Staffers created last wills that were created using worksheets and downloads that they got from three of the leading online purveyors of legal documents.
Consumer Reports subsequently engaged three prominent legal professors to review the last wills that were put together using these tools. They found flaws, and they felt as though unintended consequences could come about when inexperienced people use these generic templates.
This is a purely objective study, so you can draw your own conclusions.
Attend a Free Inheritance Planning Workshop!
We have provided a bit of information in this brief blog post, but you can rest assured that we have more learning opportunities available to you. Our firm regularly presents estate planning workshops, and you can really build on your knowledge if you attend one of these sessions.
There is no charge at all, but we do ask that you register in advance so that we can reserve your seat. Visit our workshop schedule page to get all the details, and click on the date that works for you to get specific registration information.
- Removing Life Insurance from the Taxable Estate - August 5, 2020
- Be Aware of Medicare Gaps - August 4, 2020
- When Is Probate Necessary? - July 30, 2020
