Why it is important to have an estate plan
South Carolina fans of the musician Prince might know that he did not have a will, and as a result, his estate has been tied up in probate. Aretha Franklin has also died without an estate plan. According to one of her attorneys, he urged her to make one but she simply did not get around to it.
Not getting around to it is a reason given by many of the more than 60 percent of Generation Xers and 42 percent of baby boomers who say they do not have a will. For people like Prince and Aretha Franklin, a lack of estate planning means a significant proportion of their assets will go to taxes. Furthermore, their estate must pass through the probate process, which is not private. Franklin had four children including a son with special needs. With a special needs trust, a person can set aside money to care for an individual without affecting that person’s access to government benefits such as Medicaid.
Creating a will with the assistance of an attorney instead of using a do-it-yourself kit can help ensure that the legal aspects are correct. Furthermore, a person might also want to create a revocable living trust. This is private and allows a person to make changes to the trust while still alive.
Trusts have other advantages as well and are not just for wealthy families. A trust allows a person to specify how assets will be distributed. For example, a person could indicate that children should only receive assets when they reach a certain age or level of educational attainment. This may be helpful for parents who are concerned about their children getting money in a lump sum.