Estate planning sounds like a major undertaking, maybe a little daunting, but it can be really very simple. At its most basic definition, estate planning is a process of setting (and reducing to writing) goals and intentions of who gets your assets upon your death, who makes end of life decisions for you if you are unable to do so yourself, and who can handle your financial affairs on your behalf.
You don’t want your money and assets to be distributed pursuant to what a legislature said should happen with your assets upon your death, and you want to make things easy for your family. I help people plan for the inevitable, be intentional about their estate goals, and with a keen eye to helping the family, so that when the times comes, your loved ones are taken care of and not left in turmoil, chaos, and shelling out all your assets (their inheritance) on attorney’s fees.
What Estate Planning is Not
Though estate plans can be very simple, an enforceable estate plan is not just telling your family what you wishes are as to your house, bank account, vehicle, collectibles, etc. You must put in writing your wishes for your assets. Estate planning is not doing nothing because you think everything passes automatically to your spouse or children.
Estate planning is not one-size-fits-all. What is best for you and your family may be different from what your sister, pastor, or best friend needs. This is one reason why it’s incredibly important to speak with an attorney licensed in your state and not rely on forms you get off the internet, Etsy, or Pinterest.
Spending Money Now Can Save Your Family Money Later
A good estate plan with a licensed Alabama lawyer will likely cost anywhere from $500 to $2500 for something simple that doesn’t require complex tax planning like that for multi-millionaires. If you don’t spend that money now to get properly prepared documents, your family will spend much more than $2500 in attorney’s fees, court costs, and other fees to clean up the mess you left them and get what they are entitled to receive from your estate under the intestacy laws of your state. And, if you don’t have the properly prepared documents, your family will face obstacles and hassles, will need court permission to sell your house, access bank accounts in your sole name, distribute your assets, and have to do tedious and stressful work on your estate that could have all been avoided had you taken one hour to meet with an attorney and craft your estate plan.
Last Will & Testament
When people think of estate planning, they often think of a last will and testament. Certainly, that is an essential part of any estate plan. There are three primary documents for all estate plans: Last Will & Testament, Power of Attorney, and Advance Directive for Health Care. Other documents may be necessary to meet your estate planning goals for your family, but those three are the must haves for any estate plan. Only with a consultation with an estate planning attorney in your state will you know what is best for you.
A Last Will & Testament sets forth your wishes for your stuff, whether it’s personal property (jewelry, furniture, art, etc.) or real property (personal residence, vacation home, etc). It can direct that certain property goes to specific people, or just leave it all to a spouse, children, grandchildren, other family, friends, or charity.
Estate Planning for Your Minor Children
A Last Will & Testament and Power of Attorney can also name a Guardian for your children should you die with children under the age of 19. This is the person (or persons) who will take in your children and raise them in your place. Be sure you choose wisely here. Your parent or sibling may not be the best person – don’t be afraid to name a friend or other relative. Of course, ask them first to be sure they’d be willing to take on such an incredible responsibility.
Why is Having an Estate Plan Important?
Money. Stress. Hassle. Avoid probate. Deal with taxes. When you die without a plan in place, your family will spend more money than if you had paid an attorney to prepare your estate plan. They will also have to inventory your stuff, file it with the probate court, value your property (to be filed with probate), get permission to sell your property and house, wait until an estate is open to access your bank account (if only in your name), clean out your house, deal with any creditors, and do all of this while grieving your loss.
Not having an estate plan invites family already at odds to be even more at odds. Think of many modern scenarios where a person dies during a second or third marriage. Children from the first marriage may not like the current spouse. They can make life miserable for that current spouse, and the current spouse – now widow – will be severely disadvantaged financially if you don’t have an estate plan. For example, if her name is not on the deed to the house – 50% of that house belongs to the deceased’s children!
Time and again I’ve talked to people who had a loved one die without a will and they invariably talk about how difficult the estate process was. I witnessed it within my own family when my uncle died unexpectedly and my 87-year-old grandmother and my mother administered his estate.
If you have children, the grandparents may fight over custody, causing more emotional distress to the children and costly litigation.
Where to Start with Your Estate Planning
Schedule an appointment with a licensed estate planning attorney in your state and/or community. To know what information an attorney will need for that first appointment, click here for a checklist of things you need and a checklist of things that will be good to have decided. Meet with an attorney, even if you don’t have all the answers yet. An estate planning attorney can talk you through some of your lingering questions and uncertainties about your estate plan.
Tanya Hendrix is an associate attorney at Hinson & Hinson, P.C. in Huntsville, Alabama. If you are an Alabama resident and need to speak with an attorney about your goals for you and your family, give me a call at 256-382-5863.
Alabama State Bar requires the following: No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.”