What Actually Is Estate Planning?

WHAT ACTUALLY IS ESTATE PLANNING?

Estate planning is putting a plan into place to ensure that your loved ones are taken care of if you are no longer able to access your financial accounts or even attend to your own affairs. On one hand, it’s making sure that someone can step in and make your healthcare decisions or your financial decisions and make sure you receive the type of care that you need, but it’s also taking care of the needs of the people who are dependent upon you. Older persons may have adult children who never left the nest and they still need access to the financial accounts to pay the rent or the mortgages. It is having a well thought out plan to make sure that the bills do get paid and the lights stay on.

It’s also taking into consideration each person’s unique circumstances like those adult children who at 55 are still living at home. What happens when their parent passes away and that child has no ability to provide for themselves or make a meaningful income. Those types of things need to be considered in estate planning as well as making sure that the right people step in to take care of minor children. People who understand values and beliefs and are going to raise those children. It’s also minimizing every dollar possible in court costs, attorney’s fees, professional fees and trying to have every dollar go back to people who need it the most as opposed to the courts or the industry surrounding elder care, probate and conservatorship.

Are Most People Surprised At How Many Assets They Actually Have When Creating An Estate Plan?

Everyone comes in and says I have a very simple situation, I don’t have much. They call in and they set up an appointment and we send them an estate planning questionnaire. When they bring it in, the comments I get frequently are, Wow, I didn’t realize I had so much. We have some of the valuable personal property, the life insurance, the checking and savings, retirement accounts, annuities, and the real property. A lot of people have minimal interests in other states and in California, but when they see it on paper they are sometimes amazed at how much they have. I think all of us kind of minimize our own situation, which can be to their detriment. They think that they don’t need much planning because they don’t have anything.

They are not Rockefellers or Vanderbilts or a modern day Bush or a Clinton. People think only they need estate planning, but that’s just not the case because even if you are broke and penniless, you are still you as a person. Who is going to step in and make your healthcare decisions for you?

What Happens When Someone Dies Without An Estate Plan Or A Will?

If you die without a will or a trust that is what is called dying intestate. If you have a will, that’s testate so the opposite of that is intestate. What people don’t realize is that everyone has an estate plan, but it’s the estate plan they created for you. In this case in Nashville, where they have what are called the laws of intestacy where the courts and legislature have said where your money goes, they presume that you want to take care of this new spouse and your adult children. They presume which family member you would want that money to go to, not taking into consideration the family dynamics or family history and who has really been there to help you throughout your life as you are getting older. When people rely upon the state’s plan, their money can end up in hands that they didn’t intend.

There are some famous cases of people who haven’t seen siblings or parents in decades but because they didn’t do any planning those individuals receive the estate, which is the opposite of what they would have wanted. Many times if you don’t have that plan then we are looking at probate and that’s a court process where you have to put all your family members’ personal information before the court, phone numbers, addresses and a list of all your financial assets. Now your private affairs are a matter of public record and there is a process where we have to publish notice to the creditors and then give notice to all the heirs that you probably didn’t want to receive anything. They have an opportunity to slow things down or contest or object, which can prolong things. The more the process is prolonged, the more the fees are going to be for the attorneys and court costs.

If you don’t have a plan and your assets are subject to probate then that probate process can linger for years. Usually it takes place within an year but I’ve seen probates go on for three years or four years. I’m just finishing up on one right now where the person passed away back in 2012. In addition, if you don’t have an estate plan and you are looking at probate, the family members can’t cancel their house, they can’t evict tenants, they can’t transfer title and they are really not allowed to go in the house or dispose of any personal property without court authority. Whoever steps up to manage that process, they’ve got to lay out all their financial sins before the court and get bonded. There is a four month waiting period for creditors to file a claim against the estate and the creditors know that next to the attorney they are the ones to get paid. They are not going to be willing to negotiate with the family members and offer a lesser amount, whereas if the assets had been in an estate plan or a trust it’s much more difficult for the creditors to assert a claim and so are willing to accept pennies on the dollar many times.

For more information on Estate Planning In Tennessee, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (615) 236-6892 today.