Estate planning important for everyone, regardless of net worth

March 23, 2013 (Press-News.org) Estate planning important for everyone, regardless of net worth

Article provided by Hamilton Law Office, P.C.
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People often prefer not to dwell on what happens in the event of their passing. Unfortunately, those who do not take a moment to make some decisions regarding their financial and healthcare wishes may leave these decisions to the discretion of the state.

If a person does not put together a basic estate plan, the court system will determine how assets are distributed. This can lead to some unwanted outcomes.

Dangers of not having an estate plan

Essentially, if you die in Massachusetts without a will, the state will make one for you.

Laws of intestacy, the term used to describe dying without a will, generally are designed to mimic what an average person would want. As a result, the estate of a person who does not have a will is often distributed amongst family members. If a spouse is present, the estate may be given in full to the spouse. If no spouse is present, the estate may be distributed to children, parents or extended relatives, depending on each individual situation.

Unfortunately, even if an individual's wishes are well known the intestacy laws will be followed unless an estate plan is present.

How an estate plan works

An estate plan is a valuable financial tool for everyone, regardless of their net worth. An estate plan can provide for two areas: finances and healthcare.

The estate plan can provide instructions on how assets should be handled. This can include managing finances with tasks as simple as paying bills or the more complex handling of stock portfolios in the event of incapacitation. In the event of death, an estate plan can provide guidance on how assets should be distributed. This can include providing for loved ones and charitable donations.

In addition to managing financial concerns, an estate plan can also address one's healthcare wishes. A living will can be used to outline what healthcare measures are desired and which to avoid. A health care proxy can also be used to designate a person to make healthcare decisions.

Putting together an estate plan

The following steps can help simplify the task of establishing an estate plan:
-Take stock of all assets
-Determine what you want to achieve with those assets
-Decide who you want to benefit from the assets

Ideally, an estate plan incorporates all an individual's assets. This can include insurance policies, bank accounts, stocks, bonds, real estate, personal property like jewelry and family heirlooms as well as any business interests. Siphoning through everything can be time consuming but is an important step to ensuring that an estate plan is inclusive.

In addition to making sure an estate plan includes all one's assets, it is also important to note that estate laws often change. As a result, those wishing to establish an estate plan or ensure an existing estate plan meets their wishes should contact an experienced estate planning lawyer to help ensure your estate plan works for you.