On this blog, I often focus my articles on the estate planning basics that can benefit all Massachusetts families. While there are indeed many complex estate planning options available, it is these estate planning basics that form the foundation of any good plan. CNN Money recently posted a top ten list of things to keep in mind regarding estate planning, and touched on several keys points that I thought were worth sharing.
No matter your net worth, it’s important to have a basic estate plan
Often people procrastinate initiating an estate plan because of the misconception that estate planning is only for the wealthy, and not something they really need to worry about. However, estate planning encompasses elements, such as your family’s financial and physical well-being, that concern every person. The idea behind estate planning is to ensure that your goals for your family and finances are achieved during your life and after your death.
Having an estate plan ensures that your family and financial goals will be met, no matter what. The basic components of an adequate estate plan include a will, a power of attorney, a health-care proxy and an advance directive. There are many other options in estate planning, but these are the foundation.
Everybody needs a will
A will is an essential estate planning document that lays out how you want your assets distributed when you die. It’s also the best place to name guardians for your minor children. Dying without a will — also known as dying “intestate” – means that the state will decide how your assets are divided and can be costly to your heirs. Even with a trust, a will is necessary to include any holdings outside of that trust so that your estate can avoid probate when you die.
Trusts aren’t just for the rich
Trusts are legal mechanisms that let you put conditions on how and when your assets will be distributed upon your death. They also allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay and publicity of Massachusetts probate, which can take many months to complete. Trusts can also help protect your assets from creditors and lawsuits and can allow seniors to qualify for MassHealth (Medicaid) benefits.
The bottom line is that every family in Massachusetts should, at minimum, have a basic estate plan in place. Whether we like it or not, it is certain that at some point your estate plan will come into use to help your family, unlike the many insurance policies we all have they may or may not be used at all. Don’t procrastinate securing your family’s future; call the Heritage Law Center for a free consultation.