When you get to the basics, everybody… whether you’re single, widowed, divorced, or a married couple or unmarried couple…has the same three main reasons for doing estate planning.
You’ve worked hard to save and accumulate your lifetime savings, and you want your intended heirs or charities to benefit from your efforts. These are decisions you want to make and you’d like to avoid having the courts getting involved. Life is full of uncertainties, and you’d like the right people to eventually inherit your assets at the right time when they can make wise decisions, depending on various factors including the person’s age, maturity, capabilities, needs and their personal and financial circumstances. You also want to avoid the wrong people, like in-law spouses (or ex-spouses) or greedy relatives, having any say or fighting over your estate. You can achieve these inheritance objectives through proper estate planning.
While you’re capable of doing so, you are managing your assets and deciding who to get advice from. But if you become too ill or disabled or if you pass on, you want to assure that your financial, personal and medical affairs will be handled properly and by the person or persons you choose. If you know that your loved ones may lack the financial experience and money skills themselves, you may want to choose who will manage their inheritance when you’re no longer available. Again, you can accomplish these management objectives through proper estate planning.
You want your estate to be efficiently administered for your the benefit of the people you’ve chosen, minimizing amounts spent on court fees and attorneys’ fees. That may require avoiding court supervised estate adminstration after your death depending on the types and amount of assets in your estate. During your lifetime if you become incapacitated due to illness or accident, you certainly want to avoid the expenses, delays, publicity, family dissent, headaches and aggravation of a court guardianship. You want to minimize income and capital gains taxes while you’re living and estate taxes (if applicable) after you’re gone. You may want to guard against unwelcome events in life, to protect your assets from divorce, lawsuits, creditors and bankruptcy, for yourself as well as for your loved ones who inherit from you. And you want to make sure you (and if married, your spouse) can get important long-term care if needed, without going broke in a nursing home. Again, proper and thoughtful estate planning can accomplish these preservation objectives.
Peace of Mind
Finally, there is a seldom mentioned but important fourth reason for proper estate planning: your peace of mind from knowing that you and your loved ones will be properly protected when the time comes.
Peace of mind may be the most important reason of all for estate planning. After all, the wise person knows that the most important things in life aren’t things at all.