Some people think that an estate is something only wealthy people have so only they should be concerned with estate planning. That misconception has caused countless well meaning people to ignore this kid of essential planning. Don’t be fooled: while not everyone may have an estate in the sense of a gorgeous mansion and a few Ferraris, everyone has estate. Whether your net worth is $10,000 or $10,000,000, whatever assets you leave behind after your death make up your estate. Estate planning is about making sure your wishes are known and honored, and achieving peace of mind – for you and your loved ones – regardless of age or net worth.
When a person dies, their assets must be distributed to others. This could happen in a number of ways:
- A person could pass away leaving no will or trust. If this is the case, a person is said to have died “intestate.” Unless they meet the small estate requirements for a Florida Summary Administration, a formal probate action is required to transfer the deceased’s assets to others. A probate like this can be very expensive and time consuming since potential heirs may fight over who gets what. This could mean court hearings, discovery, depositions, motions, a trial and lots of attorneys’ fees.
- A person could pass away leaving a valid Will. Now, it is a common misconception that if you have a Will, you do’t need to probate the estate. This is just wrong. If nothing else, remember: WILL = PROBATE in Florida and unless the estate meets the standard for for Summary Administration, a formal (think long, public, and costly) probate is necessary. However, since the deceased spelled out his or her wishes, this type of probate is less likely to end up in full blown litigation.
- A person could pass away leaving a valid Trust. Trusts are the darlings of the estate planning world. They give a person the most amount of control and privacy. A Trust is unique in that no probate is required to transfer the assets in the Trust. During the person’s lifetime they transferred assets out of their own name into the Trust’s name. Since the Trust owns the assets and not the person, this means that when the person dies there is no need for a probate to transfer those assets.
An Estate Plan Helps Your Family When They Need It
Not only does having an estate plan benefit your family from a probate perspective, it can save your family from having to make complicated and heart wrenching decisions while you are alive.
An estate plan can help ensure that your wishes are followed, even if you are unable to do so yourself. It will protect your family from having to make very difficult decisions. Remember the Terri Schiavo case? Terri had no estate plan informing her loved ones of her wishes which led to years and years of court battles and family feud.
Estate planning also considers the unthinkable and allows parents to name guardians for minor children in case something were to happen to them. By creating a Will and naming a guardian for minor children, parents can select the person who will give them the best possible care. Without a Will, a court will make all of these decisions for you.
Estate Planning will ensure that your financial affairs are managed according to your wishes and provide for your family, even when you can’t.
As you can see, everyone can benefit from estate planning, regardless of their net worth!!