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Do You Have An Estate Plan?

Did you know that you have an estate? It is made up of everything you own. Things like your home, cars, and bank accounts are obvious, but it also consists of your life insurance, personal household items, or even your furniture. The question is what will happen to your estate when you pass away? Who will control your possessions and ensure that your wishes are honored when you die? Also, can this ownership transfer take place in a way that limits my family the pain of legal fees, taxes, and court costs? This is why estate planning is so important and why we want to spend a moment discussing some estate planning basics.

Everyone needs an estate plan. It is not just for very wealthy people who have a lot of possessions to distribute. Estate plans can actually be more valuable to individuals of lesser means because their families cannot afford to lose out on the benefits that are left to them. Estate plans are also not just for elderly people. We never know when it will be our time to pass on and sometimes tragedies happen. Having an estate plan in place as a young adult can help make sure your wishes are observed in the event of an early death. People with children especially need to have a plan established so your wishes for your children will be clear and there will be no disagreements amongst family during a very difficult time.

An estate plan starts with either a will or a living trust. A will provides instructions for the distribution of your possessions, but does not avoid probate in many cases. The probate process can lead to extensive legal fees to complete, thus deducting from the assets your family or loved ones will receive. Some items that are jointly-owned or accounts that name a beneficiary can possibly avoid probate, but depending on the state you reside in, it is not a certainty. Many people start with a will as it is a less expensive option, but a more definitive option is a revocable living trust. A trust will be more expensive to set up, but it provides a clearer path for ownership transfer and can avoid probate in most instances. It also allows you to maintain control even after you die. When a trust is established your possessions can be distributed over time based on conditions that will have to be achieved long after your passing. A trust is managed by a trustee that ensures your wishes are honored in order for your family and loved ones to receive what you intended for them to have. A trust is especially helpful if there are minor children that need care until they are ready to receive an inheritance or in the instance when you have a loved one with special needs that will require lifetime care.

Whether you have a will or a trust, the key is having something legally binding for your family to go by after you are gone. Not having any kind of estate plan in place will lead to the state determining what happens to your estate, and most likely it will not benefit your family as you would like. If you pass away without an estate plan your assets will be distributed according to the probate laws in your state. That means the state will decide how much your spouse or children receive and with legal fees, it could only be a fraction of what they need to live on. If both parents die (in a car accident for example), the court will appoint a guardian for your children without knowing whom you would prefer to raise your children. Wouldn’t you prefer that such important things like the care of your family or who raises your children be based on your wishes? Wouldn’t you prefer to control who receives what and when?

Understanding what will happen to your estate is a very important part of a retirement plan. Sound Financial Strategies Group can help you start the process of developing an estate plan and help you connect with the attorneys when there are more complex issues required to settle. Don’t wait for someone else to decide what will happen to your estate. Call us today and start the process of developing peace of mind in this part of your retirement plan. It is one of the most considerate things you can do for your family and loves ones.

Investment Advisory Services offered through Sound Financial Strategies Group, Inc. (“SFSG”), a Registered Investment Adviser. Certain representatives of SFSG are also Registered Representatives offering securities through APW Capital, Inc., Member FINRA/SIPC, 100 Enterprise Drive, Suite 504, Rockaway, NJ 07866 (800)637-3211. SFSG and APW Capital are separate and unrelated companies. 

Sound Financial Strategies Group does not render legal advice and encourages all clients to contact their own attorney for legal matters and advice.

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