This is a confusing question for some people. The truth is that estate planning truly benefits rich, married people. There are a lot of tactics that can be used to make sure each spouse avoids estate tax, defers it as long as possible, or benefits from the marital deduction and generation-skipping trusts, to name a few things that can be employed.
But, for everyone else, there is still a good reason to plan. For one, if you don’t plan, someone else will have to deal with your stuff. Maybe you are OK with this. Personally, if my loved ones are dealing with the loss of me, it seems that it would be a good thing if I set my wishes down through a formal instrument and make things a bit easier for them. It is my stuff after all. Beyond helping your loved ones avoid that aggravation, you should plan if you have any particular desires–what happens to pet, who gets your favorite ring, etc. You would not believe the family battles that can arise when personal items, or family heirlooms, are at issue. Plan now so people think of your memory as something special–not full of pain because his/her favorite family photo that you had in your possession ultimately went to a cousin and not him/her.
For parents of minor children, you should use estate planning not so much for tax avoidance or benefits, but to plan for your children’s lives–who will take care of them, how will they take care of them, and what money will they use. Parents have so many devices available to them to make sure that their children are provided for in so many ways. Too many times parents just say, “Oh well…I will be dead and my guardians will have to do what is best.”
Stop right there!! There is more to the story.
You need to keep in mind that the guardians may want some advice from you, maybe some money to buy a bigger house to fit your kids, and your children may inherit too much too soon, throwing their lives off track. Your kids may also want to know what you would have thought of something, or know that you were OK if they went to culinary school instead of college. You can communicate to your kids. Death does not prevent that. (Ask me how…)
I won’t get into too many details in this post. But just know that estate planning is not just for those with large estates. If you have any “stuff,” pets, or minor kids, it is for you. Speak with an attorney to make sure you are better prepared. If you are in Florida, message me at AttorneyLori@lorivella.com, to receive a Pre-Meeting Packet.