A couple weeks back (after Independence Day), I wrote about the shared covenant we are blessed with in our nation. Our Constitution and our laws form a different kind of bond than what was ever seen, at least at the time of our nation’s founding.

Despite all of the seeming chaos we are subjected to by the likes of our national media, we should remember how unique and effective our system of government has been over the years.

Yes, we have some stupid laws … but we also have some very good ones.

And some of these, by the way, are concerned with the ordered and proper passing along of our assets to our family, friends and future generations. We shouldn’t take for granted how important this is — in many nations, it’s a much more chaotic process, and is sometimes even handled without law whatsoever.

So, in accordance with our flawed-but-excellent estate laws, it really makes sense to recognize the necessity of a plan.

We’d love to help you in any way that we can in this process, and we’ll even recommend some excellent outside help if it comes to that rare something that we aren’t best able to handle.

But sometimes we have to remind ourselves exactly why we should be going to the trouble in the first place …

Valerie McLaughlin’s
“Real World” Personal Strategy Note
My Eight Reasons for Having an Estate Plan
“It is not enough to stare up the steps, we must step up the stairs.” – Vaclav Havel

Many well-meaning families think that estate plans are for someone else, not them. They may rationalize that they are too young or don’t have enough money to reap the tax benefits of a plan. But as I would like to make clear, estate planning is for everyone, regardless of age or net worth.

Here are my EIGHT reasons why you should consider putting this into place right now…

1) Loss of capacity. What if you become incompetent and unable to manage your own affairs? Without a plan, the courts will select the person to manage your affairs. With a plan, you pick that person (through a power of attorney).

2) Minor children. Who will raise your children if you die? Without a plan, a court will make that decision. With a plan, you are able to nominate the guardian of your choice.

3) Blended families. What if your family is the result of multiple marriages? Without a plan, children from different marriages may not be treated as you would wish. With a plan, you determine what goes to your current spouse, and to the children from a prior marriage or marriages.

4) Children with special needs. Without a plan, a child with special needs risks being disqualified from receiving Medicaid or SSI benefits, and may have to use his or her inheritance to pay for care. With a plan, you can set up a Supplemental Needs Trust that will allow the child to remain eligible for government benefits while using the trust assets to pay for non-covered expenses.

5) Keeping assets in the family. Would you prefer that your assets stay in your own family? Without a plan, your child’s spouse may wind up with your money if your child passes away prematurely. If your child divorces his or her current spouse, half of your assets could go to the spouse. With a plan, you can set up a trust that ensures that your assets will stay in your family and, for example, pass to your grandchildren.

6) Financial security. Will your spouse and children be able to survive financially? Without a plan and the income replacement provided by life insurance, your family may be unable to maintain its current living standard. With a plan, life insurance can mean that your family will enjoy financial security.

7) Retirement accounts. Do you have an IRA or similar retirement account? Without a plan, your designated beneficiary for the retirement account funds may not reflect your current wishes, and may result in burdensome tax consequences for your heirs (although the rules regarding the designation of a beneficiary have been eased considerably). With a plan, you can choose the optimal beneficiary.

8) Avoiding probate. Without a plan, your estate may be subject to delays and excess fees (depending on the state), and your assets will be a matter of public record. With a plan, you can structure things so that probate can be avoided entirely.

I hope you do carefully consider these elements, and let us know how we can help. We would love to be a part of your generational assets being preserved rightly.

Warmly (and until next week),

Valerie McLaughlin, EA
(410) 224-2600