By Robert W. Tribuiani, Esq.
June 18, 2010
The estate planning process can almost certainly benefit anyone, not just rich people. The two most significant benefits of the estate planning process are: 1) the peace of mind that allows you to live life to its fullest; and 2) a last will and testament that can benefit you as well as the ones you leave behind.
There are many benefits to having an estate plan, but perhaps the greatest benefit is the estate planning process itself. Mahatma Gandhi once wrote, "Live as if you were to die tomorrow. Learn as if you were to live forever." This self-evident truth is the fundamental building block of the estate planning process. Along the same line of thought, there is one thing we all have in common - a life that will end in death -, and this holds true no matter how rich, talented, powerful or popular you may become. So don't wait until you reach the end of your life to be at peace with your mortality. Begin your journey through the estate planning process now, and gain the peace of mind that allows you to live your life to its fullest.
Another benefit to the estate plan is the last will and testament (a "will"). A will is an essential part of any estate plan, and it can be the most powerful part. It allows you to direct your property after you die, choose who will make sure your wishes are carried out, and designate a person to care for any minor children you leave behind. Furthermore, a person who dies without a legally executed will, which is referred to as dying "intestate," can unwittingly cause severe hardship to his or her family and friends. The will can be an extremely powerful legal document and is not just for rich people.
To illustrate this point, let's look at the benefits of a properly executed will to a person who dies single with two adult children and property consisting of a homestead with a mortgage, mutual funds with a total market value of $5,000, a checking account with a $1,000 balance, and one car (no payments). If this person, who is certainly not rich, dies with a properly executed will, the typical probate process may be completed within a few months of the person's death. During this time, the personal representative reads the will, takes an inventory of property, sells the car and other personal property, pays off the mortgage and other creditors, and distributes the remaining estate according to the wishes set forth in the will.
In contrast, if this person dies without a properly executed will, the adult children could wind up in front of a Circuit Court judge for more than a year taking inventory of property, tracking down heirs, getting consent from each and every heir to sell the car and other personal property, getting a personal representative appointed, paying down the mortgage and other creditors, and distributing the estate according to State Statutes, regardless of the person's wishes. During this time, the mortgage could go into default, the house could suffer irreparable damage, the car may not be insurable or capable of valid registration, and additional legal fees are almost certain to be assessed.
In summary, an estate plan is not just for rich people. First, the estate planning process itself may give you the opportunity to develop the peace of mind that you need to live your life to its fullest. Second, a properly executed will, an essential part of the estate plan, can provide many benefits to you and the ones you leave behind. Whether you are rich, poor, or just living paycheck-to-paycheck, start your estate planning process today!