Reasons adults need an estate plan
The American Association of Retired Persons reports that around half of adults do not have an estate plan, and some people in South Carolina may be part of that percentage. Individuals might not have a plan because they think they are too young, have too few assets or do not have family, but there are a number of reasons to create an estate plan.
Most people want some kind of control over their medical care if they were to be incapacitated. A living will that addresses a person’s wishes for end-of-life care and a power of attorney that appoints someone to make medical decisions on that person’s behalf can ensure some of this control. A financial power of attorney can appoint someone to take financial and legal action for the person.
Many assets can be passed using a will although it is important that a will is consistent with beneficiary designations and other documents that pass assets to heirs. However, some people may need more complex arrangements. For example, people may want to look into how they can use estate planning to avoid transfer tax or for charitable giving. Wealthy families may use estate planning as a way to protect that wealth and transfer it to future generations. Trusts, limited liability entities and insurance are only a few of the vehicles that may be useful in this capacity.
Trusts are not just for wealthy families. For example, a special needs trust may provide support for a family member with special needs without jeopardizing benefits that person may receive from the government. Assets become the property of the trust and not the individual. For family members who may struggle with addiction or other issues that lead them to be irresponsible with money, a trust may protect assets by only allowing distributions at certain times or under the supervision of a trustee.