Many people view estate planning as a task for the later stages of life without realizing that life can be quite unpredictable. In reality, even young families and individuals need an estate plan. Here’s why.
It’s easy to end up devoting more time to choosing where to go for dinner and planning vacations than making critical decisions that affect the entire family. Yes, we are talking about estate planning, a topic that can be unpleasant and difficult to discuss. Understandably, no one likes to think about their mortality or the risk of becoming incapacitated.
At The Law Office of David S. Schleiffarth, LLC, we understand that many people choose to procrastinate getting their estate planning done either because they think they are too young for that or because they do not have enough assets and finances to make it worthwhile. However, there is no such thing as “the right time” to start estate planning because life can throw lemons your way when you least expect it. With estate planning, you can easily squeeze those lemons to make lemonade.
Today, we are going to discuss why you need estate planning regardless of age, health, and wealth.
If you are thinking of setting up an estate plan to protect your loved ones and safeguard the things you care about, reach out to our office by calling 314-448-0527 or submitting a contact form. We serve clients throughout the greater St. Louis, Missouri area.
What Is Estate Planning?
Estate planning is a term used to describe the process of developing a plan which aims to preserve your wealth, plan for incapacity, and protect your loved ones. Contrary to popular belief, nearly everyone has an estate. An estate consists of everything a person owns, including automobiles, real estate, investments, furniture, personal possessions, savings accounts, and more.
The goal of estate planning is to address how your estate will be managed during your life, including times when you are incapacitated, and after your passing. An estate plan should be tailored to your specific needs and goals as they may vary greatly from one individual to another. However, estate planning is much more than just outlining your wishes regarding who should inherit what when you are gone. It is about controlling the otherwise uncontrollable and planning for the future.
What’s Included in an Estate Plan?
When people think of an estate plan, they generally think about a will. While a will is a vital tool in every estate plan, a comprehensive plan may also contain other documents. Below is an overview of documents that cover the most important aspects of an estate plan:
- Will. Also known as the “Last Will and Testament,” a will is a standalone document created by the Testator to communicate their wishes regarding the disposition of their assets upon their death. The document must be drafted and executed in accordance with the law of your state. For example, Missouri law requires the signatures of two competent witnesses to make the document valid (Mo. Rev. Stat. § 474.320). The will records the Testator’s wishes regarding the asset distribution and allows the Testator to name guardians for their minor children and appoint the executor who will settle their estate.
- Living trust. A living trust is an arrangement established during the Trustor’s life to give another party – the Trustee – the authority to control and manage assets for the benefit of the beneficiaries. With this trust, the Trustor can ensure that their intended beneficiaries receive the trust’s assets without having to undergo a costly and lengthy probate process.
- Power of attorney. With this written document, commonly referred to as POA, one person (the principal) gives another person (the agent) permission to make medical and financial decisions on their behalf when they are unable to handle their affairs on their own. There are several types of POAs to choose from, including durable, limited, and general.
- Advance directive. Advance directive consists of several documents that spell out your wishes and preferences regarding medical care and end-of-life care ahead of time. With these documents, you can clearly explain what types of treatments and procedures you would want and would not want in situations where you are unable to communicate your wishes on your own.
These four represent a non-exhaustive list of estate planning documents. You can also add other docs and tools to your plan if you think you need them. “But I don’t know what documents I need!” you may be thinking right now. Well, there is no such thing as a one-size-fits-all estate plan to fit everyone’s circumstances and needs. That is why you may benefit from contacting our St. Louis estate planning attorney at The Law Office of David S. Schleiffarth, LLC, to discuss your specific situation and figure out what belongs in your estate plan.
Who Needs an Estate Plan?
The simple answer to this question is – everyone. Any person who is over the age of 18 can benefit from having an estate plan in place. The need for estate planning becomes even greater as you age and start to accumulate more assets. Generally, the following individuals should consider creating an estate plan:
- Single, married, divorced, and widowed individuals;
- People who have children and those who don’t have children;
- Individuals who own any assets and those who own no property; and
- Those with significant and limited wealth.
Contrary to what most people think, you do not need to be of a particular age at which you should start working on your estate plan. There is also no minimum number of assets that should be in your possession to necessitate estate planning. Even if you are relatively young and healthy and do not think you have much in the way of financial wealth, you could still benefit from setting up an estate plan.
Reasons You Need an Estate Plan
As discussed earlier, estate planning is not just for the wealthy and terminally-ill senior citizens. There are numerous good reasons to establish and maintain an estate plan. Some of the most prominent ones are:
- Avoiding probate. The probate process can be a lengthy, complicated, and expensive ordeal for your family after your passing. If your goal is to bypass this process or, at the very least, minimize hassle for your loved ones as much as possible, your estate plan should reflect that. An attorney can help you understand the various strategies available for probate avoidance.
- Reducing taxes. You can also utilize several planning techniques to reduce your potential estate tax liability. For 2024, the estate tax exclusion limit is $13,610,000, according to the official website of the Internal Revenue Service (IRS), which is why tax reduction may be something to consider for wealthier individuals.
- Preventing family feuds. Having an estate plan that spells out your wishes can reduce the likelihood of conflicts between family members. Those disputes over inheritance and other matters can be lengthy, stressful, and extremely costly.
- Avoiding intestate succession. When someone dies intestate – or, in other words, they die and do not leave behind a valid will – the state’s intestate succession laws will apply to dictate how the deceased person’s assets should pass to their heirs. In Missouri, intestate succession is governed by Mo. Rev. Stat. § 474.010.
- Protecting your family. With an estate plan, you can make arrangements to protect your family members and your pets, provide financial security for those you care about, and eliminate many of the burdens placed on surviving loved ones.
If you pass away without an estate plan in place, the aftermath of your passing could cause dire and unwelcome consequences for the entire family. Proper estate planning can give you and your family members peace of mind knowing that your affairs are in order.
Why Do You Need an Estate Planning Attorney?
Now that we have established that everyone, yourself included, should have an estate plan, you might be wondering whether or not you need an attorney’s help with estate planning. Here are some of the ways an estate planning attorney could help you:
- Collect the necessary documentation. Creating an estate plan involves a lot of paperwork that needs to be collected and filed in a timely manner. An attorney can help you gather the documents you need and keep them organized.
- Ensure compliance with the relevant laws and procedures. When drafting estate planning documents with an attorney, you can ensure that all your paperwork is compliant with the current laws of your state. Your attorney will explain the relevant laws and procedures before getting started.
- Make sure your estate plan accurately accomplishes your goals. A skilled attorney will carefully listen to what you want to achieve through estate planning and advise you on the strategies you need to implement to accomplish your goals.
The best part about having an attorney on your side when setting up an estate plan is the fact that your attorney can provide you with the peace of mind you deserve and ensure that you make sound legal decisions regarding your future.
Frequently Asked Questions (FAQs) About Estate Planning
Below is a list of some of the most frequently asked questions we – at The Law Office of David S. Schleiffarth, LLC – often receive from people getting started with their estate planning. The information below is intended for education purposes and should not be taken as legal advice. The answers you read below cannot replace a consultation with an attorney.
- Is an estate plan mandatory?
No, there is no law that requires you to write a Last Will and Testament or create any other estate planning documents. However, having an estate plan in place can help you and your loved ones anticipate the challenging and unpredicted events of life. Remember: if you die without an estate plan, your assets may not be distributed the way you envisioned as, in the absence of your instructions for assets distribution, what happens to your estate will depend on the intestate succession laws of your state.
- Who can benefit from estate planning?
Everyone over the age of 18 can benefit from having an estate plan in place. Contrary to what you might think, estate planning is not just for the wealthy or those approaching retirement. It makes sense to consider creating an estate regardless of how young (or old), healthy (or unhealthy), and rich (or poor) you are.
- How long does it take to create an estate plan?
The time it takes to set up an estate plan varies from one individual to another and depends on a multitude of factors, including how much needs to be done. Some individuals may need only a simple plan consisting of the Last Will and Testament while others may require more complex planning. Typically, it may take anywhere from one day to several weeks to complete the process.
- How often should I update my estate plan?
A lot can change since your original estate plan was put in place, which is why it is recommended to review your estate plan periodically to ensure that it still reflects your current situation and wishes. For example, you may have had a change in your life insurance that impacts how you plan to distribute your assets. Or you may be experiencing a healthcare challenge that has changed your finances. Ideally, it is best to update your estate plan every three to five years or after major life events (marriage, divorce, childbirth, death in the family, etc.) occur.
Speak with a St. Louis Estate Planning Attorney
At The Law Office of David S. Schleiffarth, LLC, we understand that creating an estate plan can be a sensitive and personal matter, which is why we strive to guide our clients through the complicated process of estate planning and give them the tools they need to plan for both the expected and unexpected. Our St. Louis estate planning attorney will listen to your situation to learn about your preferences, goals, and circumstances to ensure that your estate plan best articulates your wishes. If you are ready to get started with estate planning, reach out to our office today. Schedule a case evaluation by calling 314-448-0527 or filling out our contact form.