If 2020 taught us anything, it's that we can never be too prepared. While no one wants to think about their own mortality, COVID-19 has really forced the issue. Rather than have your loved ones spend many years (and a lot of money) following your death trying to settle your estate, you can create an estate plan now to settle your assets. With that in mind, today we'll discuss 5 reasons you should create an estate plan in 2021.
What happens if there is no estate plan in place when you die?
When you pass away, if there is no estate plan, will, living trust, or any other documents left behind that detail your wishes, your family members will have to guess your intentions. These include, but are not limited to, determining your final wishes if you're in a medical crisis and cannot consent for yourself, the type of funeral you want, how you want your estate divided, and other factors.
Depending on your family's dynamic, this process could cause a lot of worry and anger to emerge as family members fight over what they think is rightfully theirs. No one wants this kind of drama for their family. As such, you should ideally prepare an estate plan long before you die so that your family can mourn your loss without the added weight of determining the next steps for your assets.
What is estate planning?
Estate planning is the process of legally documenting what you want to happen when you pass away or are incapable of making decisions for yourself in the case of an illness or serious injury. Estate planning is done by creating wills, trusts, advance directives, and beneficiary designations on accounts and life insurance policies.
While you can certainly manage the estate planning process on your own, we find that having an estate planning attorney on your side can simplify the process. Our estate planning legal team is experienced with the issues that come with planning for incapacity and death. As such, we are fully equipped to help our clients create an estate plan in 2021.
ELDRETH LAW FIRM | ESTATE LAWYER IN CARY NC
Why should you create an estate plan in 2021?
Most of our clients know they should create an estate plan long before they ever walk into our office. However, the fear of the unknown is very real and most people are wary of sharing their innermost thoughts with someone they hardly know.
That said, we find that most of our clients experience incredible relief once the estate planning process is complete. Therefore, if you're considering creating an estate plan in 2021, here are 5 reasons you should move from consideration into action.
1. Avoid Probate Court by Creating an Estate Plan in 2021
A probate court (or surrogate court) is a court that has competence in a jurisdiction to deal with matters of probate and the administration of estates. Without a will in place, the probate court is responsible for deciding how to distribute all matters attached to your estate. Your estate becomes public information available to the public; and in some cases, it can take several months for creditors to put through any claims against your account. Not only can going to probate court be expensive for your family, but it can also become quite stressful.
2. Minimize Taxes by Creating an Estate Plan in 2021
One thing you can do before meeting with your estate planning team is to start writing down your general wishes. You can get as detailed as you want and we can help you sort through that information as we work through the process. One component of an estate plan that many people do not know how to navigate is taxes. Specifically, our estate planning team can help you minimize the tax impact of your estate, and minimize the amount of taxes being imposed on your heirs.
3. Distribute Assets by Creating an Estate Plan in 2021
Without a will or estate plan in place, North Carolina law determines who gets what. Rather than leave those details to the government to decide, stay in control by creating an estate plan in 2021. A will determine who you want to get what assets, but you can also use trusts to control how and when assets are distributed, especially in cases in which an heir is under a certain age or unable to effectively manage the money.
4. Plan Care for Your Minor Children by Creating an Estate Plan in 2021
One of the most pertinent reasons to create an estate plan in 2021 is if you have children under the age of 18. In the event that both parents pass away (or are incapacitated) with young children at home, if there is not a will in place, the court will appoint a legal guardian to raise your child(ren). If you accomplish nothing else this year, be sure to express who you wish to raise your children in case of an emergency to prevent other family members from making those decisions later.
5. Coordinate Pet Care by Creating an Estate Plan in 2021
In North Carolina, you can create a Pet Trust, which is a legally enforceable document that allows any person to leave money or other assets to one or more named pets that are alive at the time that the trust is created. By doing this, you can name a trustee to manage money left in your estate while also specifically naming someone to continue caring for your pet(s) after you've passed. This is particularly useful for seniors who may be reluctant to get a pet out of concern that the pet will have nowhere to go when they die. By creating an estate plan, you can also protect your pets.
Contact our estate lawyer in Raleigh, NC to schedule a consultation if you have yet to start estate planning. If you don’t have an estate plan in place or haven’t reviewed yours in several years, now might be the best time to start. In addition to estate planning, our lawyer is here to help you with all your small business needs, trademarking, copyrighting, or other legal issues.