A simple step that can prevent a world of problems

Most people spend considerable time planning vacations, buying homes and saving for retirement. Yet many postpone one of the simplest and most important steps they can take to protect their families: estate planning.

Perhaps it is because nobody likes to think about death or incapacity. But estate planning is not really about death. It is about making life easier for the people you leave behind and protecting the assets and family relationships you worked so hard to build.

A well-designed estate plan can prevent a surprising number of problems.
First, it can help families avoid unnecessary court proceedings, delays and expenses. Without proper planning, loved ones may find themselves navigating a complicated legal process at an already difficult time. The right plan can simplify the administration of an estate and, where appropriate, help avoid probate altogether.

Second, estate planning can protect privacy. Court proceedings may make personal and financial information part of the public record. Depending on the planning tools used, a properly structured estate plan can help keep family affairs more private.

Third, it can reduce the risk of family disputes. When wishes are unclear, family members may disagree over who should receive what, who should make decisions or how an estate should be managed. Clear documents and thoughtful planning can spare loved ones unnecessary conflict. After all, a family gathering should not turn into a courtroom drama.

Estate planning can also help minimize taxes, defer taxes where appropriate and structure the transfer of wealth efficiently. With the right strategy, assets can be preserved for future generations rather than unnecessarily diminished by taxes, expenses or poor planning.

It can even help protect family wealth from unintended consequences. For example, parents may want an inheritance to benefit their children without exposing those assets to a child’s future divorce or other creditors. Parents may also wish to leave assets to an adult child with someone else managing those assets for the child’s benefit. Properly structured trusts and other planning tools can accomplish these goals.

Finally, estate planning is not just about distributing assets. It can establish who will manage your financial affairs or make important decisions on your behalf if you become incapacitated. Will they have the right to be paid? Will they have a duty to report to others? These are all questions that need to be considered.

The good news is that planning ahead is often far easier than fixing problems afterward. A thoughtful conversation with an estate planning attorney today can prevent significant expense, uncertainty and heartache tomorrow.
You cannot control every circumstance life brings, but you can control how prepared your family will be. Estate planning is not simply a legal task. It is an act of responsibility, foresight and love.

Contributed by Mark F. Winn, J.D., LL.M. in Estate Planning, who is a local tax, asset protection and estate planning attorney. This article is for informational purposes only, is not legal advice. Every situation is unique and should be analyzed independently by a licensed lawyer.