Why I Need an Estate Plan

Estate planning is one of those things you know you should do, but have you sat down and actually done it? Probably not. According to a recent survey by the Harris Poll, sixty-four percent of Americans have not made a will. While most U.S. adults age eighteen and over have not prepared these documents, eighty-one percent of those age seventy-two or older and fifty-eight percent of boomers (ages 53-71) have established estate planning documents. These results suggest that “as people age they realize that having an estate plan is important.” It’s important for younger people to have wills too, especially if they have children. This will ensure that their kids will be cared for by the people they would choose as guardians in the event of their death, rather than a judge making that decision. Despite these facts though, seventy-eight percent of millennials (ages 18-36) and sixty-four percent of Generation Xers (ages 37-52) do not have a will. 

So why do people avoid preparing an estate plan? Perhaps they haven’t gotten around to it, or they don’t want to talk about their deaths? Or, possibly they fear it will be difficult and expensive, and they don’t have enough assets to leave to anyone any way. No matter how much you own, you owe it to yourself and your family to plan now for the distribution of your assets upon your death. 

Different people have different reasons for making sure they have established an estate plan. Some of the most common reasons include the following: 

• To ensure minor children are cared for if parents die before the children become adults.
• To ensure that surviving family members are financially taken care of in the event of a death.
• To ensure a family business remains operational and within the family after a death.
• To protect wealth, including a family business or other assets.
• To prepare for incapacity by providing instruction for medical care and specifying who should make decisions and manage the affairs of the incapacitated person. 
• To make a plan for charitable giving, i.e. leaving gifts to the ministries and causes closest to your heart during your life.

Some of the assets you will want to address in your estate plan include:

• Real estate you own
• Vehicles you own
• Your ownership interest in a business and its assets
• Investment accounts
• Personal property including jewelry, books, art, and furniture
• Life insurance policies.

When you make a list of assets, it can be helpful to determine how those assets are owned and whether you have any designated beneficiaries on the accounts. 

With purposeful and thought-out estate planning, you can minimize the costs and expenses, including taxes, which often occur with the distribution of an estate. There are several different methods you can use to transfer your assets to your beneficiaries. Some people use a will, while others use a living trust. A trust is a legal document that you create with the help of your attorney. They are a very useful and cost-effective device for transferring property from one generation to the next. A revocable living trust offers you more flexibility while allowing you to maintain the control of your assets. By having these tools in place, you are giving your family an advantage by protecting them from the costs of probate. Probate is the procedure by which a will is approved by the Court as the valid and last will of the deceased. Even with a will probate can take anywhere from six to eighteen months to complete before assets are distributed to beneficiaries.

Two other documents that are very important are Durable Power of Attorney and Health Care Power of Attorney. Durable Power of Attorney is the person who you appoint to manage financial matters on your behalf if you are unable to, whether you become incapacitated or you're simply unavailable because you're traveling abroad. Your Health Care Power of Attorney is an another very important part of your personal planning. It is designed to help you receive the best possible care, in accordance with your wishes, if you are incapacitated and/or at the end of your life and cannot make those decisions for yourself. 

Excuses aside, it is important that everyone take the time to get their estate planning documents in order. Even a simply do-it-yourself will is fine in most cases, especially if there’s little likelihood anyone will contest it. There are many online templates you can use to keep costs down if your estate is small, and online legal services such as www.legalzoom.com are useful sources.

Plan now so that your family is provided for in the future. If you have more questions about the importance of an estate plan or would be interested in having a Life Planning Seminar at your local church, you can visit our website at unitedpentecostalfoundation.com, or call us at 636-229-7981.