Financial times are tough for a lot of families. With social isolation measures and record unemployment, many people are looking to trim expenses out of their budget. At the same time, it is more apparent now than ever that an estate plan is not something to leave to the last minute. Although you may be looking to save money, there are many pitfalls to doing your own estate planning.
One of the most common problems with estate planning is a failure to understand how debt payment and asset distribution work in probate. During probate, allowable debts will be paid first out of the estate’s assets. If you have a substantial amount of debt, you need to talk to an attorney about how to protect your assets, or it is possible they will all be used to pay off your debts, leaving nothing for your beneficiaries or heirs. With an attorney, you can discuss methods of asset protection to ensure your asset passes to your heirs instead of being used to pay your debts.
Another important reason to use a professional to help you plan your estate is so you can understand alternatives to drafting a last will and testament. This is also an important element of protecting your assets, as mentioned above. For example, if you want to pass your home to your adult child, there are certain ways to deed your property to make sure the home passes directly to that adult child instead of passing through probate.
Other issues to consider is that without an estate planning professional, it is easy to overlook the other features of estate planning. Most people think of estate planning as a way to protect their assets and make sure those assets are left in full to your chosen heirs and beneficiaries. For example, a power of attorney for healthcare is an important element of an estate plan. With a healthcare directive, you can leave instructions to your medical care professionals as to how you want your healthcare handled in the event you are incapacitated and unable to tell your healthcare providers your wishes in that moment. An estate plan can also contain a power of attorney allowing other trusted individuals to handle certain of your affairs if you are unavailable or incapacitated. If you are trying to accomplish your estate plan without the help of a professional, it is very possible you will overlook these other important types of documents.
We have experience helping our clients make prudent estate planning choices. Contact us today for a consultation.