Why Estate Planning is so important

No one likes to dwell on the prospect of his or her own death. However, the knowledge that we will eventually die is one of the things that seems to distinguish humans from other living beings. If you postpone planning for your demise until it is too late, you run the risk that your intended beneficiaries — those you love the most — may not receive what you would want them to receive whether due to extra administration costs, unnecessary taxes or squabbling among your heirs.

This is why estate planning is so important, no matter how small your estate may be. It allows you, while you are still living, to ensure that your property will go to the people you want, in the way you want, and when you want. It permits you to save as much as possible on taxes, court costs and attorneys’ fees; and it affords the comfort that your loved ones can mourn your loss without being simultaneously burdened with unnecessary red tape and financial confusion.

If you don’t take the necessary steps to create your own estate plan, the state intestate succession statute will apply. Every state has a default plan if someone dies without their own estate plan. The state’s default plan may not be what you would have wanted.

All estate plans should include, at minimum, two important estate planning instruments: a durable power of attorney and a will. The first is for managing your property during your life, in case you are ever unable to do so yourself. The second is for the management and distribution of your property after death. In addition, more and more, Americans also are using revocable (or “living”) trusts to avoid probate and to manage their estates both during their lives and after they’re gone.

Although a revocable trust is just another tool for estate planning, if properly prepared and funded, it can avoid the probate process. It is important to note, a will cannot avoid probate. A will guides the probate process and makes it easier, but a will only becomes effective once a probate proceeding validates it as the decedent’s last will and testament.

Jeffery J. McKenna is a local attorney serving clients in Nevada, Arizona and Utah. He is a shareholder at the law firm of Barney McKenna Olmstead & Pack, with offices in Mesquite and St. George. If you have questions you would like addressed in these articles, you can contact him at (702)346-1615 or jmckenna@barney-mckenna.com.