What happens when you add procrastination and misinformation together? For many of us, the combination equals failure to make an estate plan—and loved ones in disarray when we die. Estate planning experts have lots of experience with misinformation—and are eager to set us straight.
Estate Planning Is For Everyone
A common misperception is that only the very wealthy need estate plans. As
Mondaq explains, most of us really do need estate plans—and the benefit of carefully creating one is that it can really come in handy while we are still alive.
Individuals who own real property, have liquid assets, own insurance, or support loved ones who are dependent on their assistance should have an estate plan in place, regardless of value or size of the estate, marital status, or age. Estate planning also encompasses much more than the distribution of your net-worth. For example, planning for incapacity ensures that your wishes are carried out regarding decisions about your health care. An estate plan is critical for protecting the interests and future income needs of a spouse and/or minor children and can cover a range of directives for the appointment of guardians of people and property.
Your estate is also made up of more than just liquid assets. Existing inventory in a self-owned business or personal tangibles – such as jewelry, furniture, and other items of sentimental value – are often subject to disputes among family members after an unexpected death.
Estate planning is not just about distributing your assets in the event of your death. In fact, charitable giving, legacy planning, as well as planning for your future incapacity, are major areas of importance in any well-crafted estate plan. A permanent disability or incapacity can leave people and property vulnerable especially when no estate plan or advance directives exist.
Among other considerations, an estate plan can help with the following in the event of incapacity:
- Designate a health care surrogate to ensure your health care wishes are met
- Authorize a designated agent to make financial decisions on your behalf
- Authorize a successor trustee to administer your trust assets on your behalf
- Designate guardians of minor children
Fiduciaries—and Bonds Explained
When you work with an estate planning lawyer, you will create a will or trust—or even a combination. In doing so, you will designate a loved one, friend or professional to serve as your fiduciary. This person is generally referred to as the executor, trustee, or personal representative, depending on the circumstances and location. Your fiduciary will serve as the administrator of your affairs, in accordance with the intentions set forth in your estate planning documents—and the law. Fiduciary bonds are frequently requested—and sometimes even required. Referred to as the administrator, executor, probate, estate, personal representative or trustee bonds, these bonds safeguard the interests of the estate and your beneficiaries in accordance with state law. At Colonial, a leading national provider of all types of fiduciary bonds, the steps to obtaining any bond are easy: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond right from anywhere—even the law office.
Keep In Mind
When you get going with your estate plan, don’t forget about your digital assets. In particular, crypto requires special planning if you want your next gen beneficiaries to reap its value. No matter what assets you have, clearly communicating intentions and expectations in families is key to avoiding conflict (or even litigation) later. Sometimes, the preparation of a letter of instruction is a helpful way to express and document the intentions behind decisions made in a will or trust. Though not a legal document, a letter of instruction can be useful if grieving family members find themselves wondering about the arrangements made for the estate.
Still thinking you’ll just avoid worrying about an estate plan? Things might work out the way you hope—or, then again, they might not. Mondaq cautions:
If you pass away without a Will, the state you live in will apply its “laws of intestacy” to determine which individuals will receive which funds or assets. Even with a Will, your estate is subject to the probate process and assets may be distributed to individuals other than your spouse based on state law. While jointly owned property generally passes to other living owner(s) without going through the probate process (with the exception of tenancy in common), other assets may be unavailable to your spouse or significant other during probate, or may even be distributed to unintended beneficiaries, such as a spouse from a prior marriage or financially irresponsible children. Should you own a business or property with a person other than your significant other, the fair value of those assets may also not be allocated to your loved one.
News for Estate Planning Attorneys
Colonial’s direct, fully digital, user-friendly I-Bond® system reduces the time and expense typically associated with antiquated bonding processes. In addition to providing bonds directly to the general public, Colonial offers The Partnership Account® for Attorneys . This free business service provides user-friendly client management dashboards, enabling attorneys to easily coordinate, view, complete and e-file the court and fiduciary bonds clients need. See for yourself today: The Partnership Account® for Attorneys.
Founded in 1930, Colonial Surety Company is a direct writer of surety bonds and insurance products. Colonial is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed, and licensed for business everywhere in the USA.