Think of one of the nicest things anyone has done for you. Maybe someone made a grand gesture, or showed up when you needed support, or saved you from something difficult or unpleasant? Whatever it was, it probably made your life better and showed you that someone cared.
When you set up your estate plan, you are doing all those things for your loved ones.
MAKE THE HARDEST THINGS EASIER
If you have planned a funeral before, you know it is not convenient, simple, or fun. You may also be familiar with what follows: the months or years of estate administration work. You have a new family dynamic and your own grief to process, but you also have a new “part-time job” you probably never trained for- appointments and phone calls with banks, insurance companies, and government agencies, boxes full of personal property, and fielding questions from family members.
Wouldn’t it be great if things ran more smoothly at that time of life?
One day when the funeral and the estate are your own, and the person in that position is your loved one, wouldn’t you like to make the whole process easier for them? If that rings true for you, consider some of the following estate planning suggestions and benefits:
- Appoint people for each role
When a person dies without an estate plan in place, question #1 is: “Who is responsible for taking care of this?” When a person is incapacitated and cannot make decisions for themselves, it is the same question. Minor children are left behind? Same question. You may know who you would want to be responsible for decisions in those scenarios, but the doctor, the bank, and the government do not, and they follow a strict process to ensure that they do not get it wrong.
By far the simplest way to answer that question is to write down your answers in official documents—that is often the first advantage of estate planning that loved ones enjoy.
- Simplify end-of-life decisions
End of life brings up “what if?” questions that many people would answer differently. What is your highest priority as you age? Live as long as possible? Comfort? Dignity? Impact on loved ones? How about organ donation? Burial vs cremation? You may know your answers, and you may have even told loved ones. But if you haven’t formalized those decisions by executing your estate plan, they may not take effect when the time comes.
- Resolve disagreements before they happen
If you die without an estate plan in place, what you leave behind goes through the legal process of probate and ultimately gets distributed in a legally mandated way among your next of kin. The end result may not take the specifics of your family dynamics and finances into account. That can lead to a different result than you intend, especially in cases such as:
- Blended families
- Financial agreements with family members during life
- Family real estate
- Estrangement
- Young children or grandchildren
Are any children still living with you? Is there a family cabin that some siblings want to keep? Will your stepchildren already receive a separate inheritance? Any of these scenarios, and many more, can trigger unintended outcomes and lasting disputes.
Situations like these reveal one of the advantages of revocable trusts in estate planning. A revocable trust gives you increased control over who receives what, as well as when and how they receive it. You can dictate how and when young loved ones (or loved ones of any age) receive their share. You can account for existing financial arrangements. Your real estate, life insurance, and investment accounts can be distributed or managed more precisely and in coordination with each other. And you can more easily tap into the expertise and impartiality of an independent trustee or corporate trustee if needed. Implementing a revocable trust allows you to make your family legacy what you want it to be.
SMART INVESTMENT
Some benefits of a revocable trust are intangible, but others are very easily measured. A properly operated trust keeps your estate out of probate. If you own even a modest home, the cost of an estate plan is likely less than the costs associated with probate, and the difference only grows if your assets are more significant. A revocable trust has a potentially huge “return on investment” even if no tax matters arise.
But taxes may well be in play. If, for example, you or your spouse are not a US citizen, or if your estate is worth more than $3,000,000 in Minnesota, a little tax planning can make a dramatic difference in the benefit you leave to your loved ones. And that’s on top of the time and headaches you spare them by avoiding probate!
ENJOY THE SATISFACTION NOW
While estate plans have numerous advantages after you pass, you and your loved ones can immediately enjoy the peace of mind you get from putting one in place. Many people strongly value taking care of their loved ones, not being a burden, setting a good example, or simply being smart with their resources. If any of those apply to you, think about how good it will feel to get your estate plan in place. Once you do, you’ll get the satisfaction of knowing you’re living up to those values when it has the biggest impact.
