Happy New Year! Have you made your New Year’s resolutions for 2020? Every year people make New Year’s resolutions hoping to spark change and inspiration. Themes are generally recurrent and include things like eat healthier, exercise more, lose weight, quit smoking or learn something new. The fact is, no matter how hard people try, most fail to achieve their New Year’s resolutions.
So why not think outside the box and resolve to make estate planning a priority during 2020? Creating or updating existing estate planning documents can provide significant peace of mind for both you and your family.
Why is estate planning necessary?
A recent survey indicates that 57 percent of Americans do not currently have estate plans. Most claim they don’t have one because they haven’t gotten around to it or think they don’t have enough assets to pass onto loved ones. If you are in this majority, here are three consequences of not having an estate plan in place:
- End-of-life care. Estate planning is not just for what happens after you die. There are planning tools like a living will or power of attorney to let your family members and health care providers know what kind of healthcare you want to receive when you are unable to make decisions for yourself. Without such legal documents, if you become incapacitated, your loved ones won’t know what your wishes are.
- Asset distribution. If you die without a will in place, Pennsylvania’s Intestate Succession Laws will determine the distribution of your assets and property. While these laws are designed first to protect your surviving spouse and children, it may also provide for members of your extended family. Without a will, your assets may not be allocated according to your wishes.
- Provide for your dependents. Some people do not think they need to explicitly name a guardian for minor children because they assume the role will fall to their family. Guardianship provisions are an essential part of the estate planning process. Without these contingency plans, your children and other dependents may not have the financial resources or care they need.
Estate planning is a process for getting your affairs in order so that they are legally binding with the courts.
Merely talking about estate planning and what you want to have happen is not enough.
If you do not have an estate plan in place, now is the time to do it. No matter how old you are or what your income bracket is, you should still have an estate plan. If you do have an estate plan already in place, then you are on the right path. An annual review of your estate plan is wise a choice, but there are also milestones and life events that should prompt a review.