Top 10 Reasons to Spend Time and Money on an Estate Plan
1. The one you have may not be good enough:
Even if you don’t know it, you already have an estate plan. The State of Kansas has codified one in state law in the event you don’t make your own. You can find it at K.S.A. 59-501 et seq. Like most things “one size fits all”, it really doesn’t fit that well for most people.
2. Planning for incapacity:
While it is not something anyone hopes for, the unfortunate reality is that many of us will experience some period at the end of life when we don’t have the mental capacity to handle our affairs. A proper estate plan will address these issues, and it is often at this stage where planning ahead is most valuable.
3. An ounce of prevention is worth a pound of cure:
We see doctors, dentists, auto mechanics, and others in order, to be proactive. It is equally important to meet with your attorney and other advisors to make sure the investments you have made in your health and financial wellbeing are not wasted by poor planning.
4. It is one last gift and lesson to your family:
When you become ill, or pass away, the last thing your loved ones need to be focused on is or how to pay for your last expenses. Leave them a plan and roadmap via a well-executed estate plan. Not only will it lift a substantial emotional and mental burden for them, but it will show them the importance of taking care of family and planning for their own future.
5. To protect your beneficiaries:
This could be from their own bad decisions, outside influences, creditors, divorcing spouses, or family conflict as family discord can lead to substantial legal expenses. A good plan will leave no doubt as to your wishes. It is also the best manner to ensure that your family values are passed to the next generation and ensure everyone acts as effective stewards of your assets.
6. Protect a family member’s livelihood:
Many of us have family businesses including farms. Without a proper estate plan, assets of that business can be jeopardized. If a family member is dependent on a business asset, such as farmland, it is those assets that need to be protected allowing them to continue providing for their family. It allows for a quicker and less expensive transfer of assets than probate.
7. Prevent unintended tax consequences:
While very few people will have to worry about an estate tax based on the current limits, there are also tax implications in establishing basis for long held or depreciated assets. This includes purchased farmland, farm equipment, and tax deferred retirement accounts like traditional IRA's.
8. Beneficiaries with Special Needs:
It is important to ensure assets for those with special needs are properly held in a supplemental needs trust. This is to prevent disqualification from Medicaid, SSI, SSDI, or other federal or state benefits.
Families come in all different shapes and sizes. Families with multiple marriages, adoptions, or other less common structures, do not always hold up well without a thoughtful estate plan. Further, how do you provide for an in-law of 40 years without risking a grandchild’s future? Oftentimes it is not that beneficiaries are ill-intentioned individuals that need to be planned for, but they have yet to finish their own planning and may be caught off guard.
10. You are never too young or old for a plan::
Like anything else in life, time is money. The sooner you invest in an estate plan the more long-term value it will provide you and your family. Beyond the emotional security, the planning and financial tools that are part of a complete plan are incredibly useful at times. Single people, those with young children, and unmarried couples all have very specific needs that go unmet when depending on Kansas intestate statues.