Who Needs an Estate Plan?

09/22/2011

Sometimes when people find out that I prepare Wills, Trusts and other estate planning documents they tell me, "I don't have an estate plan because I don't have much of an estate."  I guess what they are really saying is that since their net worth may not be that high, an estate plan is not needed. 

Although high net worth individuals certainly can benefit from a properly prepared estate plan, so can lower net worth individuals.  Consider the following:

     1.  Do You Have Minor Children?  If so, then should want to decide who will take care of your children if you die unexpectedly while the children are still minors.  Children aren't money, but they are your most valuable asset.

     2.  Do You Have a Blended Family?  If so, then you will need a will or other estate planning document to insure that your property (be it your family heirlooms, collectons or other personal property that may not be worth much to the outside world but could be priceless to your loved ones) will go to the beneficiaries that you choose and not to the beneficiaries that your state's intestacy laws choose.

     3.  Are You Single and Do Not Have Any Children?  If so, then you will need a will for the same reason above - to insure that your property will go to the beneficiaries that you choose and not to the beneficiaries that your state's intestacy laws choose.

     4.  Has Your Spouse Recently Died?  If so, then you will need a will for the same reason above - to insure that your property will go to the beneficiaries that you choose and not to the beneficiaries that your state's intestacy laws choose.

This list is, of course, just the tip of the iceberg.  And a will is only one small piece of a good estate plan. What happens if you become disabled.  Who will make financial and medical decisions for you?  Will the property that you do have get tied up in probate so that the costs and expenses leave less for your loved ones.

You shouldn't be lulled into a false sense of security when it comes to planning for your estate. The bottom line is that pretty much everyone needs an estate plan - the rich, the not so rich, the old, and the not so old.