This week’s entry in our ongoing series on basic estate planning questions will address one of the most basic questions of all. Namely, why do you need an estate plan?
If you are like a lot of people in the Greensboro, North Carolina area, you might have considered estate planning but have probably not taken the time to create one. You might have been reluctant to take this step is for any number of reasons. You might believe, for example, that you don’t have enough money to have an estate plan, or that only old or sick people need to take this step.
To help explain why it’s so important to create an estate plan, let’s take a look at why estate planning is so important.
Basic Estate Planning Question. Isn’t estate planning just for old/sick/wealthy people?
Absolutely not. When you take a step back from all the estate planning details about issues such as probate, intestacy, estate taxes, and the like, what estate planning essentially boils down to is making choices that only you get to make. Regardless of your circumstances, age, or anything else, the choices you make through your plan are very personal decisions. Making them and letting others know what your wishes are will always be a good idea.
If you don’t make an estate plan and don’t address these important decisions, someone else will have to make these decisions for you. Who will that be? Though it depends on the type of choice and your circumstances, the other person might be your family members, a judge, or pre-existing laws the state of North Carolina has already put into place.
Basic Estate Planning Question. Can’t I just tell my family what I want?
No. Making estate planning choices is not simply a matter of telling others what you want. It’s a matter of making these decisions in a legally recognized, and therefore legally enforceable, manner.
For example, let’s say you tell your children that you want to leave them equal inheritances only after you ensure that you provide each of your grandchildren with enough money to pay for their college educations. When it comes time to distribute your estate, will your expression of your desires be enough to ensure that your inheritance wishes will be protected?
No. In order to make inheritance decisions in North Carolina, you have to use a last will and testament, a living trust, or other tools that are legally recognized. Simply expressing your wishes will do nothing. In this situation, pre-existing inheritance laws will determine how your property gets distributed regardless of what you said, who you wanted, or anything else.
Beyond that, making your decisions known in an enforceable manner makes it very clear to your family what you want. When you make a plan your family is much less likely to get into a disagreement or dispute over what your wishes were.