Who Should Consider Estate Planning?
While some people think estate planning is only for the “wealthy” this is not the case. Estate planning encompasses many planning steps that all people should do at any age. Estate planning involves protections that we all need during our lifetime, not just at death.
EXAMPLES OF ESTATE PLANNING ISSUES THAT COULD BE ADDRESSED VERY EFFECTIVELY THROUGH A REVOCABLE LIVING TRUST:
Couples or Single Individuals with Minor Children
1. Often, young people with minor children are just setting out in their asset building life. Nevertheless, they feel that they must provide for their minor children in case of an accident or premature death. Term life insurance is a very inexpensive way to accomplish this end. However, there are potential traps for the young couple, or individuals with minor children, who have wisely obtained term life insurance policies for the protection of their family. Specifically, if both parents die simultaneously the proceeds of the policy could end up being distributed to the children through probate/guardianship. Depending on the size of the policy this could be a dangerous situation because of the youth of the recipient. Do you want to give $500,000.00 to an eighteen (18) year old?
Middle Aged or Older Couples or Single Individuals with Adult Children
1. Some middle aged or older couples, or individuals who have/has acquired significant assets during the course of their earning and investing years should consider a trust. They may have adult children, who for any number of reasons, should not be given large inheritances through probate. For example, the adult child may be married to someone whom the parents feel is irresponsible with money. Or, the parents are concerned that after the inheritance their child could die and their hard earned money would end up in the hands of the spouse’s family. Sometimes parents are concerned that if they provide an outright inheritance the child may commingle those funds with the spouse and those funds could end up being subject to a divorce proceeding.