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Top Reasons for Estate Planning

According to a recent survey from Trusts & Estates, there are three primary reasons that people engage in estate planning.

  1. Avoid probate (59%)
  2. Minimize conflict between heirs (57%)
  3. Prevent children from mismanaging their inheritance (39%)

However, studies estimate that 55% to 70% of Americans do not have an estate plan or a simple will. Most of these individuals mistakenly believe they do not have enough assets to justify an estate plan, or that the cost of an estate plan outweighs the potential benefits.

Even if you have only minimal assets, avoiding probate is an excellent reason to consider creating an estate plan. The probate process can take up to 5% of an estate's total value. It also ties up property for several months, leaving heirs without the funds they need to take care of their own expenses.

If conflict between heirs doesn't seem like an issue that you need to worry about, consider the fact that grief often does strange things to otherwise civilized people. In many cases, heirs are fighting over items that are primarily of sentimental value. Outlining who you would like to receive your mother's wedding ring or grandma's favorite china is a simple way to prevent conflict when it's time to divide up the estate.

Unfortunately, managing money wisely is a skill that many people struggle with. Be realistic about the ability of your children to use an inheritance appropriately, especially if any of your heirs have previously struggled with alcohol or drug addiction, gambling problems, or compulsive overspending. With a properly prepared estate plan, you can create a trust that will set aside money to provide for your heirs without directly giving them access to your assets. Trusts can also be used to provide for the future educational expenses of your grandchildren or to support a charitable cause that you feel strongly about.

How Can We Help?

If you are in need of legal representation relating to an estate planning issue, please call our office at (626) 683-8113 or email us at info@PasadenaLawOffice.com. Our family practice attorneys are happy to meet with you to discuss your concerns and develop a customized estate plan that will best meet your needs.

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