Estate Planning: Don’t be Penny Wise, Pound Foolish

Being careful with spending your money is a good thing of course, but there are some things that are just not worth saving a few dollars on. Michigan Attorney Sean O’Bryan explains that estate planning is the one thing it is better not to cut corners on.

Over 68% of Americans don’t have a will. That means almost three-quarters of U.S. adults are leaving with no plan for their families. When it comes to the financial future of your family, estate planning with a professional is well worth it.

From avoiding family fights to keeping your assets out of court, the benefits of estate planning are almost endless. To help you better understand the value, we’ll go over some of the key benefits of setting up an estate plan.

If you own a home and have a car, you have more assets than you think. Let us help make sure your assets, heirs, and family are taken care of no matter what life throws at you.

1. Make Sure Your Wishes are Followed

One of the main benefits of estate planning is that you’ll know your family is well cared for. If you leave your wishes undocumented, your heirs, children, spouse, or grandchildren will be left with a complicated mess.

An estate plan will make sure everyone knows what should happen next. If you’re leaving cars, homes, and bank accounts behind, you want to make sure they go to the right place.

No one thinks they will die young, but unfortunately, we never know when our time will come. Even if you think your spouse can take care of everything, this isn’t always the case. By the time you pass away, your spouse could also be elderly and unable to make decisions.

Make sure you make your wishes known. Whether it's a business or a home, let everyone know your plan for the future.

2. Estate Plans Keep Your Beneficiaries Protected

People used to think that only millionaires needed estate plans. If you’re a homeowner, own a business, or even a car, an estate plan is for you. Whenever you leave this world, you want to make sure your beneficiaries are protected.

You don’t have to be wealthy to have stocks, a 401(k) account, and a home. Many parents, grandparents, and even young adults have these assets. If you leave this world without an estate plan, your beneficiaries could lose out.

Let’s say you own a second home. If you have a husband and a teenage child, what happens to the home if you and your spouse pass away? You can’t always assume your child will be an adult when you go.

An estate plan can help make sure your homes are paid for, and your child inherits them. You can also leave directives to sell your home and keep the money in a trust. Whatever you prefer, protect your beneficiaries by writing down your wishes.

If you have more than one child with a different partner, estate planning is especially helpful. Without one, a child with an ex-spouse could lose access to your assets, for example.

3. The Value of Estate Planning with Young Children

As a young parent, it’s hard to imagine you’ll pass away before your children are grown. Life happens, however, and not everything goes according to plan. In the unfortunate event that you die with young children, you want to make sure your affairs are in order.

First, you want to put a childcare plan in writing. While you assume your brother will take your children, he may not be able to when you pass away. Your parents could also be elderly and unable to care for them.

When you're making your estate plan, talk to your relatives about who would care for your children. If you have a spouse, this question is easier, but as a single parent, it can be a tough choice to make.

Next, you can give directives for your assets. Whether it’s paying for school, selling homes, or dividing up your cash, an estate plan makes sure your kids have what they need.

If you don’t have a will or estate plan, your children could fall into the hands of the court. Never assume your family or even your partner know your wishes when it comes to your children.

4. Estate Plans Offer a Tax Advantage for Your Heirs

An estate plan can help make sure your family is protected from harsh tax penalties. After you pass on, you want to make sure your family isn’t burdened with taxes, fees, and large penalties.

With a little homework and estate planning, you can ensure your heirs won’t get a giant tax bill. Estate planning reduces or eliminates state and federal taxes on inheritance and real estate. 

Without an estate plan, your heirs could pay Uncle Sam a lot of your hard-earned money. Even the simplest estate plan will protect them from taxes.

5. Estate Planning Will Keep the Peace

While your children and spouse may all get along today, this isn’t always the case. Death can make family matters messy. When it comes to money, you never know how your family will react after you’ve gone.

You also can’t predict which of your children will marry or have more children when you pass. This is where a will and estate plan can save a lot of unnecessary family strife.

Keep your family out of court with an estate plan. Save everyone a lot of stress and arguing.

You also want to choose who is in control of your finances. Let’s say your spouse is also elderly when you pass away. If you want to choose one of your children to head things up, use your estate plan to do so. The court won’t understand that your daughter has a bad shopping habit.

With more than one spouse or child, things can get especially tricky. If you remarried and your spouse is still living, your assets will likely go to them. If you want to make sure your children get certain assets, an estate plan is key.

Make sure you make a plan and a directive for all your assets. The last thing your children or partner wants to do after you pass is to fight over who gets what.

Let’s say your living spouse keeps your home, your car, and your savings. Then you’d like to divide up your stocks and your family’s second home to your children. An estate plan will let you do this.

6. You’ll Know Your Finances are Taken Care Of

With an estate plan, you can also choose a power of attorney. If you have a business with a partner or more than one child, you can name someone to deal with your assets.

The power of attorney allows someone to sign in your absence. They can sell homes, sell stocks, or anything you direct them to do. Without one, your assets or business could end up in the court system.

With an estate plan, you can also pay for your funeral or burial expenses. You can rest easier knowing that your spouse or children won’t have to pay for this on their own.

Without an estate plan, you never know where your money will go for certain. Creating an estate plan means your finances will go to the right people or places.

7. Estate Plans Help You Manage Your Inventory

Just because you don’t have ten homes and millions of dollars doesn’t mean you don’t have assets. If you have life insurance, a 401(k), a home, or a car, you have assets. Estate planning is a great time to take inventory of what you have.

You can go through as much detail as you’d like in your estate plan. Any heirloom or piece of furniture you want to include is in writing. You never know what your family will fight over or be unsure what to do with after you’ve passed.

Estate plans aren’t just for your bank accounts and real estate. Even the smallest items can go into your estate plan. From your stocks to your collectibles, take inventory of what you have and put it all in your estate plan.

Why Estate Plans are More Than Worth It

When it comes to estate plans, they aren’t just for the uber-wealthy. In fact, estate plans are extremely helpful to people of all income levels. From the care of your children to who inherits your home, any investment you make in estate planning is well worth it.

Leave the world with the peace of mind that your family is taken care of. Estate planning will help make sure your final wishes are in place.

If you’re ready to speak with an attorney about your estate or trust, fill out the contact form here to get in touch. You'll be one step closer to taking care of your loved ones.