Why You Should Have an Estate Plan
By Matt Grennell, J.D.October 30, 2018
Why You Should Have an Estate Plan
It’s something no one wants to think about, but everyone eventually has to consider: what do we want to happen to our assets once we die?
It might be the most important question you can ask yourself before you pass on. It’s a matter of making sure your loved ones are taken care of, your final wishes are respected, and your legacy is preserved.
But, how do you go about answering this important question? The answer: creating an estate plan.
An estate plan is a set of documents created with the assistance of an estate planning attorney. In short, it allows you to protect the people and things that mean the most to you, and it affords you control in determining what happens to your things after you die. It also makes your family’s life easier, as the process of managing a loved one’s affairs after they pass is remarkably complex. Taxes, trusts, attorneys—a carefully crafted estate plan will help you make sure you’re preparing your family for everything correctly and comprehensively.
If you haven’t already thought about your estate plan, now’s the time to start. Here’s why.
What are the specific benefits of having an estate plan?
Avoiding probate.
Probate is the court-supervised process of authenticating a last will. It can be a costly, confusing, and unnecessarily complicated process, but it can be avoided if you create an estate plan correctly, utilizing mechanisms such as revocable trusts.
Revocable trusts help expedite the process of transferring assets to your desired beneficiaries. This will help you avoid a situation in which your beneficiaries need money but can’t obtain what you’ve left for them.
Avoiding estate taxes.
Each state has different rules when it comes to estate taxes––different thresholds, penalties, and exemptions. There are also federal taxes to consider, with different rules that must be followed depending on your marital situation, for example. Ultimately, there is a wide variety of legal complications you need to navigate before you pass on, and having an estate plan makes that easier.
Creating an estate plan will help you identify if/when you need to do things like title assets in your wife’s name, or move assets outside the state, or set up an irrevocable trust to decrease your taxable estate.
Ensuring your wishes are followed.
Estate plans grant you more authority in defining how you spend your waning years if you become mentally incapacitated––along with what sort of medical procedures you might consent to in the effort to keep you alive. This becomes valuable in instances where you’re stricken with Alzheimer’s or experience a catastrophic injury.
Making your wishes clear can ease the burden on loved ones during highly emotional times. And if you have other wishes for how you’d like to spend your last moments, an estate plan can help ensure those are carried out ––all the way from the hospital to your eventual funeral. Again, this proves especially important in the context of your family: the more you can simplify for them, the less stressed and confused they’ll be in the midst in their time of grief.
Making your wishes clear can ease the burden on loved ones during highly emotional times.
Protecting the ones you love.
An estate plan allows you to designate who will be the guardians or caregivers for your children. It allows you to set aside assets for travel––which might be important if your family lives in disparate places across the country. Furthermore, if someone in your family has special needs, with an estate plan, you can make sure that they’re taken care of.
Protecting your assets.
Estate plans equip you with techniques and mechanisms required of not only protecting your assets, but your beneficiaries down the road. When does this become critical? When you least expect it.
When creditors begin to target your beneficiaries. It’s critical the assets you left for your loved ones are protected when the predatory creditors start swarming.
An estate plan can also give your beneficiaries a means of recourse if an ex-spouse comes knocking on the door claiming they’re owed some large sum of money or a beneficiary tries to sue the trustee.
Protecting your pets.
It’s not talked about all that much, but for many clients, pets are very much a part of their family. As such, they create trusts specifically for those animals––to make sure they’re taken care of, live the lifestyle they have grown accustomed to and placed in the hands of someone who will care for them after the owner dies.
You should review your estate plan after major life events.
Of course, you might not always have a need for an estate plan. When you’re younger, and you don’t have many assets, children, or potentially outstanding debt, there may not be an urgent need. But once you do have more responsibilities ––assets, children, pets––then to continue living without some sort of estate plan can be irresponsible.
You don’t need to be paranoid about it—if you are reading this article, there is still time. A good rule of thumb is to update your estate plan after milestone life events, such as marriage, the birth of children, the purchasing of a home, moving to a new state or after experiencing a financial windfall.
In the absence of a major life event, it’s best to review your estate plan every five to seven years.
After you set up your estate plan, then you need to take these two additional steps:
Securely store your documents. So far as securing your documents, there are a few prudent places to secure your documents. The first, if you can corral everyone involved, is a safety deposit box. It’s also a good idea to have copies of your important documents stored securely in your home. Third, you should store copies of your estate planning documents in some type of cloud storage. Finally, if your attorney offers the service they can securely store these documents for you as well. The important thing is you know where the documents are, and that the people responsible for implementing the plan know where they are located and are able to access them quickly.
Communicate with the people you’ve appointed to a role in your estate plan. On the other hand, it’s also important that you communicate regularly with everyone you’ve appointed an important role in your plan. Certain conversations are particularly important, like those concerning healthcare powers of attorney––a conversation you’ll want to enter into with your wishes firmly determined beforehand. You’ll also want to communicate with whomever you’ve appointed as your executor––the person who will help administer your will.
At the end of the day, creating and managing an up-to-date estate plan amounts to investing in the future and continued peace of your loved ones.
Ultimately your loved ones and those you hold dear are most important here.
Matt Grennell, J.D. is a Senior Advisor at Chicago Partners Wealth Advisors. Matt was born in raised in Chicago and attended law school at Loyola University Chicago. In his free time, he enjoys golfing with his 5-year-old son and spending time with family.
Important Disclosure Information
Chicago Partners is not a law firm and does not provide legal advice. Nothing in this article should be interpreted as legal advice. Any questions should be directed to a licensed attorney in your state. Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Chicago Partners Investment Group LLC (“CP”), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CP. Please remember to contact CP, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CP is neither a law firm nor a certified public accounting firm and no portion of the commentary content should be construed as legal or accounting advice. A copy of the CP’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request.
October 30, 2018
Why You Should Have an Estate Plan
It’s something no one wants to think about, but everyone eventually has to consider: what do we want to happen to our assets once we die?
It might be the most important question you can ask yourself before you pass on. It’s a matter of making sure your loved ones are taken care of, your final wishes are respected, and your legacy is preserved.
But, how do you go about answering this important question? The answer: creating an estate plan.
An estate plan is a set of documents created with the assistance of an estate planning attorney. In short, it allows you to protect the people and things that mean the most to you, and it affords you control in determining what happens to your things after you die. It also makes your family’s life easier, as the process of managing a loved one’s affairs after they pass is remarkably complex. Taxes, trusts, attorneys—a carefully crafted estate plan will help you make sure you’re preparing your family for everything correctly and comprehensively.
If you haven’t already thought about your estate plan, now’s the time to start. Here’s why.
What are the specific benefits of having an estate plan?
Avoiding probate.
Probate is the court-supervised process of authenticating a last will. It can be a costly, confusing, and unnecessarily complicated process, but it can be avoided if you create an estate plan correctly, utilizing mechanisms such as revocable trusts.
Revocable trusts help expedite the process of transferring assets to your desired beneficiaries. This will help you avoid a situation in which your beneficiaries need money but can’t obtain what you’ve left for them.
Avoiding estate taxes.
Each state has different rules when it comes to estate taxes––different thresholds, penalties, and exemptions. There are also federal taxes to consider, with different rules that must be followed depending on your marital situation, for example. Ultimately, there is a wide variety of legal complications you need to navigate before you pass on, and having an estate plan makes that easier.
Creating an estate plan will help you identify if/when you need to do things like title assets in your wife’s name, or move assets outside the state, or set up an irrevocable trust to decrease your taxable estate.
Ensuring your wishes are followed.
Estate plans grant you more authority in defining how you spend your waning years if you become mentally incapacitated––along with what sort of medical procedures you might consent to in the effort to keep you alive. This becomes valuable in instances where you’re stricken with Alzheimer’s or experience a catastrophic injury.
Making your wishes clear can ease the burden on loved ones during highly emotional times. And if you have other wishes for how you’d like to spend your last moments, an estate plan can help ensure those are carried out ––all the way from the hospital to your eventual funeral. Again, this proves especially important in the context of your family: the more you can simplify for them, the less stressed and confused they’ll be in the midst in their time of grief.
Making your wishes clear can ease the burden on loved ones during highly emotional times.
Protecting the ones you love.
An estate plan allows you to designate who will be the guardians or caregivers for your children. It allows you to set aside assets for travel––which might be important if your family lives in disparate places across the country. Furthermore, if someone in your family has special needs, with an estate plan, you can make sure that they’re taken care of.
Protecting your assets.
Estate plans equip you with techniques and mechanisms required of not only protecting your assets, but your beneficiaries down the road. When does this become critical? When you least expect it.
When creditors begin to target your beneficiaries. It’s critical the assets you left for your loved ones are protected when the predatory creditors start swarming.
An estate plan can also give your beneficiaries a means of recourse if an ex-spouse comes knocking on the door claiming they’re owed some large sum of money or a beneficiary tries to sue the trustee.
Protecting your pets.
It’s not talked about all that much, but for many clients, pets are very much a part of their family. As such, they create trusts specifically for those animals––to make sure they’re taken care of, live the lifestyle they have grown accustomed to and placed in the hands of someone who will care for them after the owner dies.
You should review your estate plan after major life events.
Of course, you might not always have a need for an estate plan. When you’re younger, and you don’t have many assets, children, or potentially outstanding debt, there may not be an urgent need. But once you do have more responsibilities ––assets, children, pets––then to continue living without some sort of estate plan can be irresponsible.
You don’t need to be paranoid about it—if you are reading this article, there is still time. A good rule of thumb is to update your estate plan after milestone life events, such as marriage, the birth of children, the purchasing of a home, moving to a new state or after experiencing a financial windfall.
In the absence of a major life event, it’s best to review your estate plan every five to seven years.
After you set up your estate plan, then you need to take these two additional steps:
Securely store your documents. So far as securing your documents, there are a few prudent places to secure your documents. The first, if you can corral everyone involved, is a safety deposit box. It’s also a good idea to have copies of your important documents stored securely in your home. Third, you should store copies of your estate planning documents in some type of cloud storage. Finally, if your attorney offers the service they can securely store these documents for you as well. The important thing is you know where the documents are, and that the people responsible for implementing the plan know where they are located and are able to access them quickly.
Communicate with the people you’ve appointed to a role in your estate plan. On the other hand, it’s also important that you communicate regularly with everyone you’ve appointed an important role in your plan. Certain conversations are particularly important, like those concerning healthcare powers of attorney––a conversation you’ll want to enter into with your wishes firmly determined beforehand. You’ll also want to communicate with whomever you’ve appointed as your executor––the person who will help administer your will.
At the end of the day, creating and managing an up-to-date estate plan amounts to investing in the future and continued peace of your loved ones.
Ultimately your loved ones and those you hold dear are most important here.
Matt Grennell, J.D. is a Senior Advisor at Chicago Partners Wealth Advisors. Matt was born in raised in Chicago and attended law school at Loyola University Chicago. In his free time, he enjoys golfing with his 5-year-old son and spending time with family.
Important Disclosure Information
Chicago Partners is not a law firm and does not provide legal advice. Nothing in this article should be interpreted as legal advice. Any questions should be directed to a licensed attorney in your state. Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Chicago Partners Investment Group LLC (“CP”), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CP. Please remember to contact CP, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CP is neither a law firm nor a certified public accounting firm and no portion of the commentary content should be construed as legal or accounting advice. A copy of the CP’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request.