If your net worth is large, an estate plan is vital. Net worth is not the only factor in deciding if you need an estate plan. There are several circumstances that may require you to have an estate plan to safely cover your interests and those of your family members.
If you have children under the age of eighteen, you need an estate plan to name your children’s guardian after your death. You can also use your plan to make provisions for your children’s education and other financial needs.
Special Care Beneficiaries
If you die, what will happen to disabled family members who rely on you for financial support? Unless you leave a plan, such as a Trust in that family member’s name, your loved one may meet uncertain financial times, or your estate could be heavily burdened with paying for that person’s care.
Do you have an heir that you feel might mismanage his or her inheritance? You can use an estate plan to create a special trust that disperses funds to that person over time. You can use the Trust to dictate an age or a life goal to be met before the beneficiary receives the inheritance.
If you or your spouse is in a second marriage, your beneficiary situation may be complicated. When second marriages occur there is the possibility of blended families and children by different spouses. If you want to leave an inheritance to a step child or other person from a complicated family situation, you must use an estate plan. If you do not have a Last Will and Testament, your state intestacy laws will determine your heirs at law, and that may disinherit some valuable members of your blended family.
Recently Widowed or Divorced
If you and your spouse had joint property, upon his or her death, all property will pass to you. This is the time to start an estate plan if you did not already have one. Since you are now the sole owner, you must determine who will inherit all estate belongings next.
Divorce is a similar situation. You must create an estate plan to determine where assets now solely in your name will go. You will also need to update account beneficiaries, since your spouse was likely the previous designated beneficiary.
- Effective Planning for Single Seniors - October 1, 2023
- Your Guide to Navigating the Labyrinth of Trusts - September 28, 2023
- Paving the Way For the Future: An Estate Planning Guide for Millennials - September 24, 2023