December 19, 2020

2 Important Reasons You Need an Estate Plan (video)

The first reason you need an estate plan is to be in control of the distribution of your estate.

Without a plan, the State, not you, decides who controls distribution of your stuff. You lose all choice when a Judge takes over.

Recently I had a lady come in who had just lost her husband unexpectedly. He owned valuable land close to the XNA airport only in his name. But he had never written a plan for how that land was to be distributed.

So, the state decided how it was to be split up. She gets 1/3^rd of a “life estate” in the property. A life estate means she owns 1/3^rd of it during her lifetime only. She can’t sell it without his children’s permission. Then when it would sell, she would only get a portion of the 1/3^rd because it’s a life estate. Figuring she is about 65 years old; she gets 65% of 1/3^rd of the estate or about 22% of the total instead of 33%. And the older she gets, the less she gets if the land is sold.

His children split the other 78% evenly between them.

If you want to control who gets what, when, and how much; control who will manage your affairs if you can’t; protect your assets and finances; protect your family; or control who manages your healthcare if you can’t then you need an estate plan.

The second reason is that without a plan, the State, not you decides who controls and manages your money, property, affairs, and healthcare if you can’t. You lose all power.

Mark had been diagnosed with rapid onset dementia. Fortunately, his wife brought him in to get a durable power of attorney almost immediately. After determining that he still had the mental capacity to sign, we had him execute a durable power of attorney with his wife as his agent.

Due to an unfortunate turn of events, he needed to go into long term care about 8 weeks later.

Without his durable power of attorney, his wife would have needed to go to court to get a guardianship. That would have taken about $3,200 and trips to court instead of the $600 they spent on the durable powers of attorney. Not to mention, they don’t have to see a Judge and make part of their private affairs public.

The same goes for healthcare. Without a healthcare power of attorney, somebody will need to step up and get a guardianship to be able to oversee medical treatment.

If you want a say in who will stand in your place to make decisions, then you need an estate plan.

Not to mention reducing and eliminating taxes, headaches, anxiety for your family, worry, hassles, and money given to lawyers to settle the estate.