Everyone’s personal and financial situation is different, which is why every estate plan is different. Your plan will depend on what you hope to achieve with your estate plan, as well as your family and financial circumstances.
In some cases, people don’t know if they even need an estate plan. Although this may come down to personal preference, there are some cases when you will certainly want some type of estate plan in place, no matter how much money you have.
Children – If you have children that you would like to inherit your property and other assets, you will want to have an estate plan. This is especially important if those children are minors. While your children are still young, it is extremely important that you have an estate plan that addresses the serious issues of who will care for your children if something should happen to you, as well as how to pay for their care. If you do not have an estate plan, a court will appoint a guardian for your children, as well as decide how to handle their inheritance.
A Disabled Beneficiary – If you plan to leave all or part of your estate to a disabled beneficiary, an estate plan is the only way to do this without jeopardizing that person’s government assistance. In a case where you leave assets directly to the disabled beneficiary, they are often disqualified from assistance. When this happens their inheritance must be used to pay for their care, and what you have left them will quickly disappear.
Irresponsible Beneficiary – In some instances the person that you plan to leave money to may not be the most responsible individual, or perhaps you are worried that their spouse may take control of their inheritance. In this situation, an estate plan that includes a trust is the best course of action.
You Are Not Married – If you are in a relationship but are not legally married, an estate plan will ensure that your partner inherits what you would like them to have. Without an estate plan the court will decide who inherits your assets, and according to law your partner may have no claim to those assets.
Blended Families – If you have children from a prior marriage and have remarried, an estate plan is a must. This is the only way you can be sure that all of your children are treated equally, as well as your new spouse.
Divorce or Death of a Spouse – If your spouse has passed and left you any assets, such as a life insurance policy, retirement accounts or joint property, you will want an estate plan. Though these assets may have passed to you without going through probate, they will not pass to your beneficiaries in the same manner. An estate plan will ensure that all goes smoothly when your estate is settled. If you have divorced, you will need to update your estate plan, as well as remove your former spouse from any life insurance policies or retirement accounts.