Updated: Jan 5
Do you have family and friends that you know do not have any estate planning in place? Do you know how to broach the topic of why having an estate plan is important? Each person has a different reason why he or she would start an estate plan. Some do it because they have minor children. Others do it because they are worried about incapacity or estate taxes. A few do it so that they can control from the grave. Additionally, some do it because they want their family to be financially secure. And many do it to achieve peace of mind about what would happen if they pass away. Two good ways to encourage your loved ones are: (1) Show them what you did for your estate planning; and (2) Find the issue that makes a loved one concerned about the future and teach them why creating an estate plan would give them the peace of mind as it relates to that issue.
The list below is not inclusive, but has several of the most common reasons why someone would start an estate plan:
Minor children or grandchildren. In a Will and Durable General Power of Attorney, a guardian and conservator should be named for the minor children. This would give your loved one peace of mind knowing that his or her minor children would be taken care of in the event he or she is no longer able to do so. If you are a grandparent to a minor grandchild, reiterating to your children of the importance of naming guardians for their children will better ensure that your grandchildren will be raised by a trusted family member or friend.
Concerns about incapacity. A Durable General Power of Attorney, a Power of Attorney for Healthcare, a Directive to Physicians, and a Revocable Living Trust would allow an individual to continue to manage a loved one's financial and legal affairs, as well as make medical and healthcare decisions on behalf of a loved one in the event of incapacity.
Concerns about protecting assets for a spouse. With proper estate planning, a loved one can continue to provide for a surviving spouse, while also protecting his or her portion of the estate from the surviving spouse's creditors (e.g., lawsuit) and predators (e.g., future relationships), maximizing estate tax protection, and providing future beneficiary protection (i.e., the surviving spouse cannot disinherit the deceased spouse's beneficiaries).
Beneficiaries that are minors or financially irresponsible. Within a Will or a Revocable Living Trust, your loved one can control the amount of an inheritance a beneficiary receives, as well as how and when the beneficiary receives it (i.e., strings can be attached to the inheritance).
Beneficiaries with special needs. Within a Will or a Revocable Living Trust, your loved one can provide for beneficiaries who have special needs in a way that would allow the beneficiary to continue to receive (or qualify for) needs-based government benefits.
Concerns about estate taxes or income taxes for beneficiaries. With proper estate planning, estate taxes can be eliminated or mitigated and income tax planning for beneficiaries can be maximized.
Long-term care concerns. With proper estate planning, a well-spouse does not have to spend down the entire estate in order for an ill-spouse to qualify for government assistance. With proper estate planning, a well-spouse can continue to provide for an ill-spouse receiving government assistance without jeopardizing the ill-spouse's eligibility.
Concerns about the administration and costs of the estate at a death. With proper estate planning, the costs and work involved during the administration of an estate at a death can be mitigated. Having no estate plan generally means more expense and more work.
Desire to leave a legacy. With proper estate planning, a loved one can create a legacy, whether within the family (e.g., a property to be used for generations to come) or for a charity. No estate planning means no legacy planning and no charitable planning.
Family conflicts (i.e., "family drama"). With proper estate planning, a loved one can avoid or minimize potential future family conflicts and drama. A loved one can designate who he or she would like to be in charge (whether as an agent under Power of Attorney, as an estate's Personal Representative, or as Trustee). A loved one can also designate who would receive certain personal effects (e.g., the diamond ring). By doing proper estate planning, a lot of the potential conflicts can be addressed before they become actual conflicts.
Like a lot of things, getting started is often the most difficult step in the process. If you have a loved one who is ready to take that first step in the estate planning process, or if you would like to review your current estate plan, please call Rehberg Law Group at 206.246.8772 to schedule a no-cost appointment.