There are a variety of reasons to have a well-thought-out estate plan. Nixon Peabody's experienced estate planners point to these reasons for estate plans a -- regardless of a client’s wealth.
Does one have to have a large estate to need an estate plan?
“While there is some modest cost to put together even a very simple estate plan, nothing is so expensive as the administration of an unplanned estate.”—Jay D. Rosenbaum
“Although it can be tempting to rely on intestate law rather than establish an estate plan, the law is not designed to grow and change with your family as an estate plan is. For example, intestate law may fail to protect any children who have spendthrift or addiction issues that inform their ability to handle money. Even a simple estate plan can avoid unnecessary complications and achieve a more desirable result for families based on the individual’s unique insight into his or her family dynamic. Once in place, an estate plan can easily be revisited and revised based on life events making it well worth the initial time and effort.”—Sarah M. Roscioli
“An estate plan can do more than provide tax benefits for individuals with large estates and net worth. No matter the size of your estate, having a simple estate plan—a will, health care proxy and durable power of attorney—in place can give your loved ones peace of mind in knowing that your personal wishes will govern in the event of expected and unexpected life events.”—Kaitlyn Barnett
“For parents of minor children, an estate plan allows them to appoint guardians to care for their children as well as set up a structure, which is typically a trust, for the management of their financial assets until their children are older.”—Sarah T. Connolly
“A family member may have special needs or may be a spendthrift. In those cases, a trust is an ideal vehicle to provide for the prudent and safe management of the beneficiary’s inheritance, while protecting him or her from the reach of creditors.”—Evelyn V. Moreno
“There is a frequent misconception that trusts are only useful for the wealthy. However, leaving your inheritance in a properly structured trust rather than outright, will protect the inheritance from your children’s future creditors, including a divorcing spouse. And if the trust is properly drafted, the child can still have a large degree of control, without risk of attacks from creditors.”—Kenneth F. Hunt
“It’s important that an estate plan is coordinated in all respects. I have experienced a number of cases in which a client, in an effort to “avoid probate,” has utilized techniques such as holding title to assets in joint name or registering securities in “transfer on death” format, only to decimate a distribution plan contemplated in their will. For example, in one case a client had titled virtually all of his assets in joint name with his wife, leaving insufficient assets to pass under his will where substantial bequests to his children were intended.” —John L. Garrett.
Guest blog courtesy of Nixon Peabody. Read more Nixon Peabody blogs here.
