Florida fans of Aretha Franklin may know that she died without an estate plan despite the fact that she had a special-needs son and her health was poor. Prince also died without a will, and his relatives have still not received any payments from the estate. While most people do not have to worry about estate tax with the federal exemption currently at $11.18 million, there are a number of other reasons to create an estate plan.
Without a will, state law decides what happens to a person’s assets. A will can name an executor to oversee the process of identifying and distributing assets and a guardian for minor children. A person might also want to avoid probate and keep an estate plan private. In that case, the person may want to set up a living trust. Once the trust is created, it is necessary to transfer assets into it.
Married couples should have estate plans that are separate but compatible. Beneficiary designations and property that is jointly owned with right of survivorship must also be compatible with the estate plan since these override instructions in a trust or will. An estate plan also needs to be reviewed regularly since changes in family or a person’s assets could mean it needs to be updated.
One advantage of working with an attorney to create an estate plan is that an attorney can help ensure that the documents are prepared correctly. This means it is less likely that any legal challenges will be successful. An attorney may also assist in preparing powers of attorney to appoint people to make medical and financial decisions if the person becomes incapacitated.