One way to ensure that your assets go to the people you want is to have a comprehensive estate plan to spell out your wishes and intentions. A well thought out estate plan will outline your wishes for your beneficiaries and usually involves the assistance of an estate planning or elder law attorney. If you do not have an estate plan, you may be surprised to learn that your wishes will not always be followed. Let’s look at why you should have an estate plan and what could happen if you do not. It is never too late to make the necessary steps to ensure your loved ones are protected!
When you begin the estate planning process, you may wish to make provisions for beneficiaries that may not handle their money responsibly. If you have children, you can set a date by which they must graduate from a college or trade school and can also set a time limit to have the beneficiary complete rehabilitation or sobriety programs if they are struggling with an addiction. Planning for irresponsible beneficiaries may sound difficult, but it can be easy when you work with our team at Your Legacy Legal Care and use the right estate planning tools.
One way to plan for this situation is to make use of incentive trusts. These are a type of trust designed to encourage or disincentivize certain behavior. For example, an incentive trust can require a beneficiary to finish college to qualify for a larger portion of their inheritance. Alternatively, a beneficiary can be rewarded with income for every dollar earned. A special needs trust, on the other hand, may protect a beneficiary from losing government benefits or other benefits if the beneficiary is unable to earn enough money to keep up with their needs.
In addition to implementing rules, you can set a time limit for when their inheritance is distributed. You can also set an age restriction on the inheritance, even if your beneficiaries are not minors. However, this is particularly important if the beneficiaries are under the age of 18. If the beneficiary is young, he or she might be too young to understand the consequences of receiving an inheritance upon turning 18. However, if they are a minor, it may be advisable to set up a trust that will allow the trustee to control the distribution of the inheritance.
Aside from preventing family fights and possible financial turmoil for your loved ones, an estate plan is also an effective way to ensure that your assets are handled in the manner you would have wanted. These documents can be created to specify the beneficiaries and the terms of an inheritance. Even if you do not have much money, estate plans can help ensure that your possessions are passed on in a manner you would have wanted and avoid any potential arguments between your loved ones upon your death. The peace of mind that an estate plan provides will be invaluable to your family and loved ones.
An estate plan can protect your assets and minimize the time it takes to go through probate (or avoid it altogether). By including a medical power of attorney and a statutory durable power of attorney in an estate plan, your loved ones will be able to make decisions for you in the event of your incapacity, which will assist in avoiding guardianship.
Perhaps the most important reason to have an estate plan is to provide for your immediate family. This is particularly important if you have children, as it will specify who you would like to raise them if you die. If you die without an estate plan, the court will decide who will raise the minor children. An estate plan can help minimize taxes, court costs, and allow beneficiaries to keep more of their inheritance. Probate will take many months to complete, even if everything goes smoothly, and is not cheap (or fun)!
While most people have some sort of will, estate planning is not limited to just that one document. Trusts allow you to control how your assets are distributed and can cover specific circumstances. Thorough estate planning can protect your family from financial hardships after your death. Not all families are close or on good terms, so if you do not want your family to inherit from your estate, then you should have an estate plan that states so. Some people consider friends more important than blood relatives. If you don’t plan ahead, the beneficiaries you intend to leave your assets to may not get them.
Estate planning is important for everyone. At a minimum, you should have a will and powerful powers of attorney. However, many people do not plan ahead for these important documents, and it is a common mistake to procrastinate on executing them before they are needed. By taking the time to sit down with our team at Your Legacy Legal Care, you’ll avoid many potential financial, legal, and health care issues. Get started today by calling us at (281) 218-0880 or schedule online by clicking here!
Kimberly Hegwood is the Managing Attorney of Your Legacy Legal Care, a Houston estate planning law firm. With more than 25 years of experience practicing law in Texas, she represents clients in a wide range of legal matters, including elder law, asset protection, estate planning, Medicaid crisis planning, probate, guardianship, and other estate planning practice areas.
Kimberly received her Juris Doctor from the South Texas College of Law and is a member of the State Bar of Texas.
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