Lauren Summers is the Content Marketing Strategist for Miller, Miller & Canby, one of the most respected law firms in Montgomery County, and the Washington, DC metropolitan area. The firm focuses on five core areas of practice: Land Development, Real Estate, Litigation, Business and Tax, and Trusts and Estates Law. In her spare time, she reads books and plays board games with her husband and two kids.
Preparing for old age is part of the growing up and maturity process. Saving money for your retirement, getting an insurance plan, buying a house, and investing in a business are just some of the things you can do to secure your future. Planning what to do with your estate is also an ideal way to prepare for old age.
An estate is a collective term for all your properties, assets, and personal belongings. Your bank accounts, real estate and land, house, car, investments, and jewelry are all part of your estate. So, everyone has an estate, not just rich people or families. Regardless of how small or expansive your estate is, you have to take care of it. An estate planning attorney can help point you in the right direction.
What is Estate Planning?
Estate planning is the process of making a plan or written instructions that should be carried out after you pass away. It contains details about your properties or assets and to whom these should be distributed. It also indicates instructions for what to do or how to properly allocate your inheritance, life insurance, businesses, and finances. An estate plan may also include disability and long-term care instructions in case you will need them.
The role of the estate planning lawyer is to ensure that your instructions are followed.
If you do not yet have an estate plan, now is the best time to prepare one. Aside from securing your family’s future, there are many other reasons why estate planning is a vital part of your preparations for old age.
Your Inheritance Goes to the Right Person
With an estate plan, you can designate who will inherit your assets and personal belongings after you are gone. You have the freedom to choose who gets to keep your house, car, and other properties. You can also appoint a guardian to help your minor children with their inheritance.
Without an estate plan, the courts have the legal right to decide which asset goes to which family member or loved one. Additionally, the courts do not rule that your estate will automatically go to your surviving spouse; they can distribute it to anyone. There is also the possibility of a delay in the processing, on top of additional expenses, and a list of fees to pay.
An Estate Plan Protects Your Family
With an estate plan, you are guaranteed that your family is protected and secure after your death. Your will ensures that your children, especially those under 18 years of age, have a future to look forward to. You can leave a trust fund for them or perhaps one of your houses. Some parents leave educational funds for their children. Whatever you wish your children to inherit, you are free to give to them because it is your will.
If you do not have an estate plan or a will, the courts will not only be the ones to distribute your properties; they will also have custody of your children. Your family or relatives will have no legal right to raise your kids.
Your Estate Won’t Go to Probate Court
A probate court is where your properties or assets are assessed, and your will is authenticated. After fees, bills, and taxes are paid off, the court will distribute to your heirs whatever remains of your estate. This court-supervised process can take more or less six months to complete. It can also cost a lot and may even be stressful for your family and relatives.
This is what happens during the probate process: the court designates an executor or representative of your estate. The executor then hires a lawyer, who is tasked to manage the proceedings of the estate distribution. The executor and the lawyer are each to receive an administrative fee equivalent to more or less 5% of your assets.
Proper estate planning helps minimize state inheritance taxes and federal and state estate taxes. Your lawyer will know what to do to ensure that your beneficiaries will receive their share of your estate without worrying about overpaying taxes and other costly fees.
Without an estate plan, your family and loved ones will have to contend with inheritance and estate taxes. Your estate's total value is also significantly reduced.
Your Properties and Assets Remain in Your Family
In your estate plan or will, you can include instructions that ensure your properties and assets are distributed to your children – and grandchildren – if your spouse remarries after your death.
Without an estate plan, you won’t only lose your assets but also your children. Without your will, the courts have the legal authority to act as their guardian.
Choose an Executor for Your Estate
With an estate plan, you can choose an executor who will manage your estate. You’ll have the freedom to appoint someone you know, someone you trust. If you do not have an estate plan, the courts will choose an executor for you.
Avoid Family Misunderstandings and Fights
Inheritance matters can break families apart. Siblings fight over money. Relatives try to outdo each other, showing off why one is more deserving than the other. These scenarios are bound to happen if you do not have a concrete, detailed estate plan.
With an estate plan, you can assign an executor and manager for your assets and finances, set up a trust fund for your child or children, and decide which family member gets the house, land, car, investments, jewelry, and even your precious collections (whatever they may be). With an estate plan, dividing your finances among your family and loved ones won’t be a problem.
With an estate plan, you are sure that your assets are managed properly.
Setting up an estate plan while you’re still young and able is important if you want to ensure long-term security for your family. Without a will, your beneficiaries will have to contend with overpriced taxes and fees and a lengthy court battle. Talk to your estate planning lawyer now and start securing your loved one’s future.