January is the time for New Year’s Resolutions, which often center on finances. However, people often forget that estate planning is a critical component of your financial plan. Despite the importance of estate planning, more than half of Americans do not have an estate plan in place at all. Even if you do have an estate plan in place, it is important to review your estate plan to make sure that your documents are not out of date and you are taking advantage of all the estate planning tools that can save your family cost, time and hassle later on.
The benefits of estate planning are numerous and really every adult should have an estate plan in place. An estate plan not only helps ensure that your wishes are followed in terms of who should distribute your property and how it should be distributed, but it also can save your family money by minimizing taxes and reducing the cost of the court proceeding to administer your property after you die, called Probate. Estate planning also allows you to eliminate the need for a Probate court proceeding altogether with use of a Living Trust, use of a Transfer on Death Deed (TODD) or retitling of assets. Parents of minor children are also able to appoint a guardian if they are both killed in an accident.
Estate planning is also not about just planning for your death, but also about planning for mental incapacity caused by injury, dementia or illness. With a Health Care Directive, you are able to appoint someone to act as your agent in making health care decisions when you are legally unable to do so and can specify your wishes regarding medical treatment. This helps to minimize conflict in your family about the proper medical treatment and helps avoid a guardianship court proceeding, which can be costly and is also public. Similarly, a financial Power of Attorney allows you to appoint someone to make decisions regarding your finances and legal matters, if you become mentally incompetent, which avoids the necessity of appointing a conservator to manage your finances. This is especially important to your financial goals if you have actively managed investments.
Given the numerous benefits of estate planning, hopefully, you will make estate planning part of your financial New Year’s resolutions. However, because advice on estate planning is largely dependent on the circumstances of your individual case, it is important to talk to an experienced estate planning attorney about your individual situation. To speak with an experienced estate planning attorney, contact Tentinger Law Firm at 952-953-3330 or use our quick contact form.