Your Estate Matters
College degree not needed for estate planning
ARRANGING AFFAIRS to plan for death or potential disability is not what most people consider fun.
Even so, some people recognize that planning is necessary, and some won't ever plan.
So who are the ones who do their planning? What are the reasons to take the time and make the effort to do your estate planning now, before anything happens?
An AARP survey in 2000 found that older people with an annual income of $50,000 or more and those with a college degree are most likely to have at least a simple will. The best single indicator that a person would do any estate planning was having a college degree.
Educated people may have more exposure to the reasons why estate planning is so important, but anyone can learn, and learning is important because without estate planning, the state will step in after you die, have control of your assets, and make those choices for you. Do you really want that?
Many people ask me, "Do I even have an estate?" If you own a home or other property, have savings, a pension plan, a 401K, an IRA or other material goods, then, yes, you have an estate. Here in Hawaii, just owning a home is reason enough for many people to formulate an estate plan.
WITH AN estate plan, you determine when and how assets will be distributed. Without an estate plan, your assets may end up in probate, taking unnecessary time and expense for your family to inherit. Your assets may be distributed to the wrong people or to the right people at the wrong time.
While death and distribution of assets are the reasons considered by most people who choose to plan, let's think about the other scenario: What happens if there is a disability?
If you become incapacitated, do you want to have already selected somebody to handle your affairs, or do you want to leave it to the court? If medical decisions are needed, do you want to still control who can make them, and what those treatments should be?
With an estate plan, you make the choices, and you make them before crisis arises.
Another reason to give serious thought to an estate plan is taxes. Without a plan, there could be estate, capital gains and income taxes, all of which could have been minimized with a plan in place.
Lastly, if you have heirs who are vulnerable because they are minors, have special needs, or are even possible creditors, you can provide protection. Without a plan, an heir with a disability may lose income and needs-based public medical benefits when you die. With an estate plan, you can set up a special-needs trust to safeguard the interests of that beneficiary. A plan also lets you to state who you want to be the guardian for your children.
WHETHER you have a college degree shouldn't be the determining factor in making informed choices about an estate plan. Your thoughtful consideration in creating an estate plan now will pave the way for a smooth transition later.
Attorneys Judith Lee Sterling and Michelle H. Tucker, of Sterling & Tucker, can be reached through www.sterlingandtucker.com
or by calling (808) 531-5391.