5 Dangers of Not Having an Estate Plan
Preparing an estate plan is not always at the top of everyone's to do list but most people know that they need to "do something" at some point. Below are five reason why you should not put off creating an estate plan.
1. Medical decisions. If you do not plan and there is a medical emergency, who will know what your wishes are? Will anyone be able to make medical decisions on your behalf? Who will make those decisions? Think about what the alternative is to not planning. If you become incapacitated and are unable to communicate your wishes, you want to be sure that you've appointed someone to make those decisions and that they know what your wishes are. This is accomplished by a Medical Power of Attorney.
2. Financial decisions. Similar to appointing someone to make medical decisions on your behalf, it is important to appoint someone to make financial decisions. If you are incapacitated, who will do your banking? Who will pay your bills? Creating a Durable Power of Attorney allows you to appoint someone to handle your finances. Someone that you choose, not the court. If you don't plan, the court will have to pick someone and it may be someone you do not want handling your finances.
3. Minor children. Another danger of not planning is leaving minor children without a named guardian or necessary financial support. Who will your kids live with? Who will manage their inheritance? Will they have enough from their inheritance to support them and provide for an education? There are many considerations when planning for minor children, such as naming a guardian and conservator. If you don't want your kids to have their inheritance at age 18 and want them to become more mature before receiving it, that requires some planning to make that happen.
4. Children's creditors. A concern for some families is the child that may not hold a regular job, can't save money and has creditors after them trying to collect on past due bills. Do you want your hard earned money that you've saved your whole life going to your child's creditors? Is your child going to receive any benefit from the inheritance if it goes directly to a creditor? There are way to plan to make sure your children's creditors do not take their inheritance so it can be used for your child's benefit.
5. Special needs child. Failing to plan when you have a special needs child can cause your child further harm. If they are receiving public benefits or supplemental security income (SSI), an inheritance could reduce or eliminate their benefits. That could affect everything from their housing to their medical care. Proper planning will allow you to supplement your child's benefits with an inheritance and allow them to continue to receive the benefits they have been receiving.
Bottom line: Don't wait! Get an estate plan in place that meets your needs and accomplishes your goals. If you have questions or want more information, contact Coonen Law at (616) 951-1531 for a complementary estate planning consultation.