A lot of people think that estate planning is only for the wealthy. This just not the case. No matter what size estate you have, it is important that you have an estate plan for during and after your life. In fact, while the wealthy may have more property to protect, estate planning can be even more critical for those with smaller estates.
Why?
Because very often it is more important for those with smaller estates to better manage what they have. In other words, you simply cannot afford to lose any part of your smaller estate.
Planning to Avoid Estate Taxes and Probate Costs.
The value of estate planning cannot be overstated.
One major advantage to having a Legacy Estate Plan lies in its ability to create an asset protection plan, avoid the unnecessary costs of probate, and to create a lifetime estate plan. A lifetime estate plan covers the importance of granting an agent, typically a friend or a family member, the rights to manage your healthcare and financial decisions in the unexpected circumstance that you become incapacitated.
Under such circumstances, a Legacy Estate Plan would prevent the additional costs of guardianships and conservatorships which are necessary without lifetime estate planning. If you do not appoint your healthcare and financial agents, then they will end up spending thousands of dollars (anywhere from $3,000-$5,000) setting up guardianships and conservatorships to be granted that authority to manage your healthcare and financial decisions.
For example, if a married couple has an estate worth $10,262,834.00 at the end of 20 years which grows at 6% rate every year, and both spouses die within one year of each other at the end of this 20-year period, not having an estate plan could cost their children $2,565,134.00 in federal estate taxes and $121,814 in unnecessary probate fees. With a proper estate plan in place, however, the cost of paying estate taxes as well as the additional cost and delay of probate proceedings could have been avoided. On top of this, an estate plan would ensure that their assets will go to their beneficiaries in the manner they choose.
Avoid Leaving Your Family in a Mess.
Another reason why estate planning is critical for big or small estates, is because it can help you avoid leaving your family in a complete mess when you die. Having an estate plan will go a long way towards avoiding unnecessary probate costs, chaos, and family fights over who gets what when you die. When you have an estate plan that directs who gets what and how, and which appoints someone to be in charge if you become incapacitated, you can prevent family discord and costly legal expenses. Instead of burdening your grief-stricken family at the worst possible time, you will be easing the way for them and sparing them additional emotional turmoil.
Don’t Know Where to Start?
Don’t worry. We are estate planning attorneys with offices in Sedona, Arizona. We offer free consultations and we are available to service all of Arizona. We can help you with your estate planning needs. Contact us to set up your free appointment.
