I’ve had people come up to me and say “I don’t need estate planning because I don’t have anything.” These people mistakenly believe that estate planning is all about death planning for their stuff. What they do not realize is that estate planning is life planning.
The definition of estate planning is: I want to control my property while I am alive and well, plan for me and my loved ones if I become mentally disabled, and when I am gone, I want to give what I have to whom I want when I want the way I want.
With this definition of estate planning, mental disability is not overlooked. Everyone, no matter how large or small his or her estate, should have at least a will-based plan which consists of a durable financial power of attorney, durable power of attorney for health care and a will. Most people with any assets would also benefit from a trust.
So what are some of the reasons that I would want to set up an estate plan if it does not have to do with death or taxes? Well, here are just a few:
Maintain control of my assets while I am alive and well.
Provide for me and my loved ones upon my mental disability.
Choose who will manage my assets and who will make my personal and health care decisions upon my mental disability.
Plan for my long term health care, including decisions regarding life support and nursing home care.
Avoid the living probate (guardianships and conservatorships).
Assure that my wishes and directions are carried out.
Choose who will manage my assets upon my death.
Teach fiscal responsibility to my children and grandchildren who may not be capable or experienced in managing assets.
Protect my children from a prior marriage.
Provide for the needs of my surviving spouse.
Provide for the education and special needs of my children and grandchildren.
Protect assets I leave to my beneficiaries from lawsuits, divorcing spouses, new spouses, bankruptcy and other claims.
Avoid death probate.
Prevent or discourage challenges to my plan.
Reward or encourage my beneficiaries who make intelligent life decisions, and prevent depletion of my estate by those who do not make wise decisions.
Recognize the differing needs and abilities of my children; fair is not necessarily equal.
Provide for my pets.
Provide for my favorite charities.
As you can see, you do not have to have a lot of stuff to need estate planning.
By: Matthew M. Wallace, CPA JD
Published edited February 22, 2009 in The Times Herald newspaper, Port Huron, Michigan as: Have nothing? Plan anyway