Estate Planning - A Necessity

Irrespective of the size of your estate, your age, or the complexity of your situation, an estate plan is a necessity. Traditionally, estate planning was thought beneficial only for those with large assets. However, that misconception is not true. Estate plans are in fact designed to help protect the interests of family members so that one’s wishes are carried out and loved ones are taken care of after an individual’s death. Further, during these uncertain times, estate plans create in writing final property and health care wishes. Other benefits include nomination of guardians for minor children, specific gifts to charities or individuals, expressed funeral or burial arrangement, and appointment of healthcare or financial agents during incapacity or extended hospital stays.

The misconception partly results from the basic definition of an estate. An estate consists of all property owned by an individual at their time of death including property, which includes real estate, also bank accounts, stocks, bonds, personal property, real property, promissory notes, and intellectual property. Absent a will or a funded trust, intestate laws govern the disposition of one’s estate assets at the time of death. This process of intestate or testate disposition is formally recognized as a probate, which is a court process wherein a qualified individual acts to marshal a decedent’s assets and debts along with other necessary tasks. Probate can be costly, public, and lengthy, resulting in fees incurred which could have been avoided with the creation of a proper estate plan. However, the definition of an estate is not the sole defining aspect of an estate plan.

The current pandemic Covid-19 has placed a spotlight on a lesser-known but equally compelling reason to create comprehensive estate plans. The need for written expression of one’s financial governance, health care, or medical governance during incapacity, end-of-life decisions, or after death decisions at a time when people are isolated, incapacitated, and inaccessible to family is imperative. A trusted person or succession of them are nominated to act in a fiduciary capacity. They can do various tasks in their capacity as the agent, which include writing checks to pay bills, running a business, making financial decisions, approving drug administration, surgery, or other medical decisions. Durable powers of attorney and advance health care directives are such documents that allow for planning. 

Further, making arrangements for after death ceremonies such as funeral, burial, or cremation can differ based on family values, religion, and traditions. Laying out that information ahead of time eases the responsibility for one’s family and loved ones and reduces the uncertainty and confusion during the grieving process. State and local official guidelines provide a further layer of confusion, which can be avoided by pre-planning. For example, some states permit online or virtual attendance of funeral ceremonies and burials or no personal physical contact funerals with prepackaged individual meal boxes to be offered for attendees in lieu of buffet or family-style meals. All of which can be arranged ahead of time with a specific instruction letter contained in a comprehensive estate plan.

Therefore, estate planning has many uses beyond the succession of one’s assets, it also helps individuals provide contingencies during incapacity and loss.